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106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    106-477

=======================================================================



 
               TRIBAL SELF-GOVERNANCE AMENDMENTS OF 1999

                                _______
                                

 November 17, 1999.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 1167]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Resources, to whom was referred the bill 
(H.R. 1167) to amend the Indian Self-Determination and 
Education Assistance Act to provide for further self-governance 
by Indian tribes, and for other purposes, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Tribal Self-Governance Amendments of 
1999''.

SEC. 2. FINDINGS.

  Congress finds that--
          (1) the tribal right of self-government flows from the 
        inherent sovereignty of Indian tribes and nations;
          (2) the United States recognizes a special government-to-
        government relationship with Indian tribes, including the right 
        of the Indian tribes to self-governance, as reflected in the 
        Constitution, treaties, Federal statutes, and the course of 
        dealings of the United States with Indian tribes;
          (3) although progress has been made, the Federal bureaucracy, 
        with its centralized rules and regulations, has eroded tribal 
        self-governance and dominates tribal affairs;
          (4) the Tribal Self-Governance Demonstration Project, 
        established under title III of the Indian Self-Determination 
        and Education Assistance Act (25 U.S.C. 450f note) was designed 
        to improve and perpetuate the government-to-government 
        relationship between Indian tribes and the United States and to 
        strengthen tribal control over Federal funding and program 
        management;
          (5) although the Federal Government has made considerable 
        strides in improving Indian health care, it has failed to fully 
        meet its trust responsibilities and to satisfy its obligations 
        to the Indian tribes under treaties and other laws; and
          (6) Congress has reviewed the results of the Tribal Self-
        Governance Demonstration Project and finds that transferring 
        full control and funding to tribal governments, upon tribal 
        request, over decision making for Federal programs, services, 
        functions, and activities (or portions thereof)--
                  (A) is an appropriate and effective means of 
                implementing the Federal policy of government-to-
                government relations with Indian tribes; and
                  (B) strengthens the Federal policy of Indian self-
                determination.

SEC. 3. DECLARATION OF POLICY.

  It is the policy of Congress to--
          (1) permanently establish and implement tribal self-
        governance within the Department of Health and Human Services;
          (2) call for full cooperation from the Department of Health 
        and Human Services and its constituent agencies in the 
        implementation of tribal self-governance--
                  (A) to enable the United States to maintain and 
                improve its unique and continuing relationship with, 
                and responsibility to, Indian tribes;
                  (B) to permit each Indian tribe to choose the extent 
                of its participation in self-governance in accordance 
                with the provisions of the Indian Self-Determination 
                and Education Assistance Act relating to the provision 
                of Federal services to Indian tribes;
                  (C) to ensure the continuation of the trust 
                responsibility of the United States to Indian tribes 
                and Indian individuals;
                  (D) to affirm and enable the United States to fulfill 
                its obligations to the Indian tribes under treaties and 
                other laws;
                  (E) to strengthen the government-to-government 
                relationship between the United States and Indian 
                tribes through direct and meaningful consultation with 
                all tribes;
                  (F) to permit an orderly transition from Federal 
                domination of programs and services to provide Indian 
                tribes with meaningful authority, control, funding, and 
                discretion to plan, conduct, redesign, and administer 
                programs, services, functions, and activities (or 
                portions thereof) that meet the needs of the individual 
                tribal communities;
                  (G) to provide for a measurable parallel reduction in 
                the Federal bureaucracy as programs, services, 
                functions, and activities (or portions thereof) are 
                assumed by Indian tribes;
                  (H) to encourage the Secretary to identify all 
                programs, services, functions, and activities (or 
                portions thereof) of the Department of Health and Human 
                Services that may be managed by an Indian tribe under 
                this Act and to assist Indian tribes in assuming 
                responsibility for such programs, services, functions, 
                and activities (or portions thereof); and
                  (I) to provide Indian tribes with the earliest 
                opportunity to administer programs, services, 
                functions, and activities (or portions thereof) from 
                throughout the Department of Health and Human Services.

SEC. 4. TRIBAL SELF-GOVERNANCE.

  The Indian Self-Determination and Education Assistance Act (25 U.S.C. 
450 et seq.) is amended by adding at the end the following new titles:

                   ``TITLE V--TRIBAL SELF-GOVERNANCE

``SEC. 501. ESTABLISHMENT.

  ``The Secretary of Health and Human Services shall establish and 
carry out a program within the Indian Health Service of the Department 
of Health and Human Services to be known as the `Tribal Self-Governance 
Program' in accordance with this title.

``SEC. 502. DEFINITIONS.

  ``(a) In General.--For purposes of this title--
          ``(1) the term `construction project' means an organized 
        noncontinuous undertaking to complete a specific set of 
        predetermined objectives for the planning, environmental 
        determination, design, construction, repair, improvement, or 
        expansion of buildings or facilities, as described in a 
        construction project agreement. The term `construction project' 
        does not mean construction program administration and 
        activities described in paragraphs (1) through (3) of section 
        4(m), which may otherwise be included in a funding agreement 
        under this title;
          ``(2) the term `construction project agreement' means a 
        negotiated agreement between the Secretary and an Indian tribe 
        which at a minimum--
                  ``(A) establishes project phase start and completion 
                dates;
                  ``(B) defines a specific scope of work and standards 
                by which it will be accomplished;
                  ``(C) identifies the responsibilities of the Indian 
                tribe and the Secretary;
                  ``(D) addresses environmental considerations;
                  ``(E) identifies the owner and operations/maintenance 
                entity of the proposed work;
                  ``(F) provides a budget;
                  ``(G) provides a payment process; and
                  ``(H) establishes the duration of the agreement based 
                on the time necessary to complete the specified scope 
                of work, which may be 1 or more years;
          ``(3) the term `inherent Federal functions' means those 
        Federal functions which cannot legally be delegated to Indian 
        tribes;
          ``(4) the term `inter-tribal consortium' means a coalition of 
        two or more separate Indian tribes that join together for the 
        purpose of participating in self-governance, including, but not 
        limited to, a tribal organization;
          ``(5) the term `gross mismanagement' means a significant, 
        clear, and convincing violation of compact, funding agreement, 
        or regulatory, or statutory requirements applicable to Federal 
        funds transferred to a tribe by a compact or funding agreement 
        that results in a significant reduction of funds available for 
        the programs, services, functions, or activities (or portions 
        thereof) assumed by an Indian tribe;
          ``(6) the term `tribal shares' means an Indian tribe's 
        portion of all funds and resources that support secretarial 
        programs, services, functions, and activities (or portions 
        thereof) that are not required by the Secretary for performance 
        of inherent Federal functions;
          ``(7) the term `Secretary' means the Secretary of Health and 
        Human Services; and
          ``(8) the term `self-governance' means the program 
        established pursuant to section 501.
  ``(b) Indian Tribe.--Where an Indian tribe has authorized another 
Indian tribe, an inter-tribal consortium, or a tribal organization to 
plan for or carry out programs, services, functions, or activities (or 
portions thereof) on its behalf under this title, the authorized Indian 
tribe, inter-tribal consortium, or tribal organization shall have the 
rights and responsibilities of the authorizing Indian tribe (except as 
otherwise provided in the authorizing resolution or in this title). In 
such event, the term `Indian tribe' as used in this title shall include 
such other authorized Indian tribe, inter-tribal consortium, or tribal 
organization.

``SEC. 503. SELECTION OF PARTICIPATING INDIAN TRIBES.

  ``(a) Continuing Participation.--Each Indian tribe that is 
participating in the Tribal Self-Governance Demonstration Project under 
title III on the date of enactment of this title may elect to 
participate in self-governance under this title under existing 
authority as reflected in tribal resolutions.
  ``(b) Additional Participants.--
          ``(1) In addition to those Indian tribes participating in 
        self-governance under subsection (a), each year an additional 
        50 Indian tribes that meet the eligibility criteria specified 
        in subsection (c) shall be entitled to participate in self-
        governance.
          ``(2)(A) An Indian tribe that has withdrawn from 
        participation in an inter-tribal consortium or tribal 
        organization, in whole or in part, shall be entitled to 
        participate in self-governance provided the Indian tribe meets 
        the eligibility criteria specified in subsection (c).
          ``(B) If an Indian tribe has withdrawn from participation in 
        an inter-tribal consortium or tribal organization, it shall be 
        entitled to its tribal share of funds supporting those 
        programs, services, functions, and activities (or portions 
        thereof) that it will be carrying out under its compact and 
        funding agreement.
          ``(C) In no event shall the withdrawal of an Indian tribe 
        from an inter-tribal consortium or tribal organization affect 
        the eligibility of the inter-tribal consortium or tribal 
        organization to participate in self-governance.
  ``(c) Applicant Pool.--The qualified applicant pool for self-
governance shall consist of each Indian tribe that--
          ``(1) successfully completes the planning phase described in 
        subsection (d);
          ``(2) has requested participation in self-governance by 
        resolution or other official action by the governing body (or 
        bodies) of the Indian tribe or tribes to be served; and
          ``(3) has demonstrated, for the previous 3 fiscal years, 
        financial stability and financial management capability.
Evidence that during such years the Indian tribe had no uncorrected 
significant and material audit exceptions in the required annual audit 
of the Indian tribe's self-determination contracts or self-governance 
funding agreements shall be conclusive evidence of the required 
stability and capability for the purposes of this subsection.
  ``(d) Planning Phase.--Each Indian tribe seeking participation in 
self-governance shall complete a planning phase. The planning phase 
shall be conducted to the satisfaction of the Indian tribe and shall 
include--
          ``(1) legal and budgetary research; and
          ``(2) internal tribal government planning and organizational 
        preparation relating to the administration of health care 
        programs.
  ``(e) Grants.--Subject to the availability of appropriations, any 
Indian tribe meeting the requirements of paragraphs (2) and (3) of 
subsection (c) shall be eligible for grants--
          ``(1) to plan for participation in self-governance; and
          ``(2) to negotiate the terms of participation by the Indian 
        tribe or tribal organization in self-governance, as set forth 
        in a compact and a funding agreement.
  ``(f) Receipt of Grant Not Required.--Receipt of a grant under 
subsection (e) shall not be a requirement of participation in self-
governance.

``SEC. 504. COMPACTS.

  ``(a) Compact Required.--The Secretary shall negotiate and enter into 
a written compact with each Indian tribe participating in self-
governance in a manner consistent with the Federal Government's trust 
responsibility, treaty obligations, and the government-to-government 
relationship between Indian tribes and the United States.
  ``(b) Contents.--Each compact required under subsection (a) shall set 
forth the general terms of the government-to-government relationship 
between the Indian tribe and the Secretary, including such terms as the 
parties intend shall control year after year. Such compacts may only be 
amended by mutual agreement of the parties.
  ``(c) Existing Compacts.--An Indian tribe participating in the Tribal 
Self-Governance Demonstration Project under title III on the date of 
enactment of this title shall have the option at any time thereafter 
to--
          ``(1) retain its Tribal Self-Governance Demonstration Project 
        compact (in whole or in part) to the extent the provisions of 
        such compact are not directly contrary to any express provision 
        of this title, or
          ``(2) negotiate in lieu thereof (in whole or in part) a new 
        compact in conformity with this title.
  ``(d) Term and Effective Date.--The effective date of a compact shall 
be the date of the approval and execution by the Indian tribe or 
another date agreed upon by the parties, and shall remain in effect for 
so long as permitted by Federal law or until terminated by mutual 
written agreement, retrocession, or reassumption.

``SEC. 505. FUNDING AGREEMENTS.

  ``(a) Funding Agreement Required.--The Secretary shall negotiate and 
enter into a written funding agreement with each Indian tribe 
participating in self-governance in a manner consistent with the 
Federal Government's trust responsibility, treaty obligations, and the 
government-to-government relationship between Indian tribes and the 
United States.
  ``(b) Contents.--Each funding agreement required under subsection (a) 
shall, as determined by the Indian tribe, authorize the Indian tribe to 
plan, conduct, consolidate, administer, and receive full tribal share 
funding, including tribal shares of Indian Health Service competitive 
grants (excluding congressionally earmarked competitive grants), for 
all programs, services, functions, and activities (or portions 
thereof), that are carried out for the benefit of Indians because of 
their status as Indians withoutregard to the agency or office of the 
Indian Health Service within which the program, service, function, or 
activity (or portion thereof) is performed. Such programs, services, 
functions, or activities (or portions thereof) include all programs, 
services, functions, activities (or portions thereof) where Indian 
tribes or Indians are primary or significant beneficiaries, 
administered by the Department of Health and Human Services through the 
Indian Health Service and grants (which may be added to a funding 
agreement after award of such grants) and all local, field, service 
unit, area, regional, and central headquarters or national office 
functions administered under the authority of--
          ``(1) the Act of November 2, 1921 (25 U.S.C. 13);
          ``(2) the Act of April 16, 1934 (25 U.S.C. 452 et seq.);
          ``(3) the Act of August 5, 1954 (68 Stat. 674);
          ``(4) the Indian Health Care Improvement Act (25 U.S.C. 1601 
        et seq.);
          ``(5) the Indian Alcohol and Substance Abuse Prevention and 
        Treatment Act of 1986 (25 U.S.C. 2401 et seq.);
          ``(6) any other Act of Congress authorizing agencies of the 
        Department of Health and Human Services to administer, carry 
        out, or provide financial assistance to such programs, 
        functions, or activities (or portions thereof) described in 
        this section; or
          ``(7) any other Act of Congress authorizing such programs, 
        functions, or activities (or portions thereof) under which 
        appropriations are made to agencies other than agencies within 
        the Department of Health and Human services when the Secretary 
        administers such programs, functions, or activities (or 
        portions thereof).
  ``(c) Inclusion in Compact or Funding Agreement.--Indian tribes or 
Indians need not be identified in the authorizing statute for a program 
or element of a program to be eligible for inclusion in a compact or 
funding agreement under this title.
  ``(d) Funding Agreement Terms.--Each funding agreement shall set 
forth terms that generally identify the programs, services, functions, 
and activities (or portions thereof) to be performed or administered, 
the general budget category assigned, the funds to be provided, 
including those to be provided on a recurring basis, the time and 
method of transfer of the funds, the responsibilities of the Secretary, 
and any other provisions to which the Indian tribe and the Secretary 
agree.
  ``(e) Subsequent Funding Agreements.--Absent notification from an 
Indian tribe that is withdrawing or retroceding the operation of one or 
more programs, services, functions, or activities (or portions thereof) 
identified in a funding agreement, or unless otherwise agreed to by the 
parties, each funding agreement shall remain in full force and effect 
until a subsequent funding agreement is executed, and the terms of the 
subsequent funding agreement shall be retroactive to the end of the 
term of the preceding funding agreement.
  ``(f) Existing Funding Agreements.--Each Indian tribe participating 
in the Tribal Self-Governance Demonstration Project established under 
title III on the date of enactment of this title shall have the option 
at any time thereafter to--
          ``(1) retain its Tribal Self-Governance Demonstration Project 
        funding agreement (in whole or in part) to the extent the 
        provisions of such funding agreement are not directly contrary 
        to any express provision of this title; or
          ``(2) adopt in lieu thereof (in whole or in part) a new 
        funding agreement in conformity with this title.
  ``(g) Stable Base Funding.--At the option of an Indian tribe, a 
funding agreement may provide for a stable base budget specifying the 
recurring funds (including, for purposes of this provision, funds 
available under section 106(a) of the Act) to be transferred to such 
Indian tribe, for such period as may be specified in the funding 
agreement, subject to annual adjustment only to reflect changes in 
congressional appropriations by sub-sub activity excluding earmarks.

``SEC. 506. GENERAL PROVISIONS.

  ``(a) Applicability.--The provisions of this section shall apply to 
compacts and funding agreements negotiated under this title and an 
Indian tribe may, at its option, include provisions that reflect such 
requirements in a compact or funding agreement.
  ``(b) Conflicts of Interest.--Indian tribes participating in self-
governance under this title shall ensure that internal measures are in 
place to address conflicts of interest in the administration of self-
governance programs, services, functions, or activities (or portions 
thereof).
  ``(c) Audits.--
          ``(1) Single agency audit act.--The provisions of chapter 75 
        of title 31, United States Code, requiring a single agency 
        audit report shall apply to funding agreements under this 
        title.
          ``(2) Cost principles.--An Indian tribe shall apply cost 
        principles under the applicable Office of Management and Budget 
        Circular, except as modified by section 106 or other provisions 
        of law, or by any exemptions to applicable Office of Management 
        and Budget Circulars subsequently granted by Office of 
        Management and Budget. No other audit or accounting standards 
        shall be required by the Secretary. Any claim by the Federal 
        Government against the Indian tribe relating to funds received 
        under a funding agreement based on any audit under this 
        subsection shall be subject to the provisions of section 
        106(f).
  ``(d) Records.--
          ``(1) In general.--Unless an Indian tribe specifies otherwise 
        in the compact or funding agreement, records of the Indian 
        tribe shall not be considered Federal records for purposes of 
        chapter 5 of title 5, United States Code.
          ``(2) Recordkeeping system.--The Indian tribe shall maintain 
        a recordkeeping system, and, after 30 days advance notice, 
        provide the Secretary with reasonable access to such records to 
        enable the Department of Health and Human Services to meet its 
        minimum legal recordkeeping system requirements under sections 
        3101 through 3106 of title 44, United States Code.
  ``(e) Redesign and Consolidation.--An Indian tribe may redesign or 
consolidate programs, services, functions, and activities (or 
portionsthereof) included in a funding agreement under section 505 and 
reallocate or redirect funds for such programs, services, functions, 
and activities (or portions thereof) in any manner which the Indian 
tribe deems to be in the best interest of the health and welfare of the 
Indian community being served, only if the redesign or consolidation 
does not have the effect of denying eligibility for services to 
population groups otherwise eligible to be served under Federal law.
  ``(f) Retrocession.--An Indian tribe may retrocede, fully or 
partially, to the Secretary programs, services, functions, or 
activities (or portions thereof) included in the compact or funding 
agreement. Unless the Indian tribe rescinds the request for 
retrocession, such retrocession will become effective within the time 
frame specified by the parties in the compact or funding agreement. In 
the absence of such a specification, such retrocession shall become 
effective on--
          ``(1) the earlier of--
                  ``(A) one year from the date of submission of such 
                request; or
                  ``(B) the date on which the funding agreement 
                expires; or
          ``(2) such date as may be mutually agreed by the Secretary 
        and the Indian tribe.
  ``(g) Withdrawal.--
          ``(1) Process.--An Indian tribe may fully or partially 
        withdraw from a participating inter-tribal consortium or tribal 
        organization its share of any program, function, service, or 
        activity (or portions thereof) included in a compact or funding 
        agreement. Such withdrawal shall become effective within the 
        time frame specified in the resolution which authorizes 
        transfer to the participating tribal organization or inter-
        tribal consortium. In the absence of a specific time frame set 
        forth in the resolution, such withdrawal shall become effective 
        on--
                  ``(A) the earlier of--
                          ``(i) one year from the date of submission of 
                        such request; or
                          ``(ii) the date on which the funding 
                        agreement expires; or
                  ``(B) such date as may be mutually agreed upon by the 
                Secretary, the withdrawing Indian tribe, and the 
                participating tribal organization or inter-tribal 
                consortium that has signed the compact or funding 
                agreement on behalf of the withdrawing Indian tribe, 
                inter-tribal consortium, or tribal organization.
          ``(2) Distribution of funds.--When an Indian tribe or tribal 
        organization eligible to enter into a self-determination 
        contract under title I or a compact or funding agreement under 
        this title fully or partially withdraws from a participating 
        inter-tribal consortium or tribal organization, the withdrawing 
        Indian tribe or tribal organization shall be entitled to its 
        tribal share of funds supporting those programs, services, 
        functions, or activities (or portions thereof) which it will be 
        carrying out under its own self-determination contract or 
        compact and funding agreement (calculated on the same basis as 
        the funds were initially allocated in the funding agreement of 
        the inter-tribal consortium or tribal organization), and such 
        funds shall be transferred from the funding agreement of the 
        inter-tribal consortium or tribal organization, provided that 
        the provisions of sections 102 and 105(i), as appropriate, 
        shall apply to such withdrawing Indian tribe.
          ``(3) Regaining mature contract status.--If an Indian tribe 
        elects to operate all or some programs, services, functions, or 
        activities (or portions thereof) carried out under a compact or 
        funding agreement under this title through a self-determination 
        contract under title I, at the option of the Indian tribe, the 
        resulting self-determination contract shall be a mature self-
        determination contract.
  ``(h) Nonduplication.--For the period for which, and to the extent to 
which, funding is provided under this title or under the compact or 
funding agreement, the Indian tribe shall not be entitled to contract 
with the Secretary for such funds under section 102, except that such 
Indian tribe shall be eligible for new programs on the same basis as 
other Indian tribes.

``SEC. 507. PROVISIONS RELATING TO THE SECRETARY.

  ``(a) Mandatory Provisions.--
          ``(1) Health status reports.--Compacts or funding agreements 
        negotiated between the Secretary and an Indian tribe shall 
        include a provision that requires the Indian tribe to report on 
        health status and service delivery--
                  ``(A) to the extent such data is not otherwise 
                available to the Secretary and specific funds for this 
                purpose are provided by the Secretary under the funding 
                agreement; and
                  ``(B) if such reporting shall impose minimal burdens 
                on the participating Indian tribe and such requirements 
                are promulgated under section 517.
          ``(2) Reassumption--(A) Compacts and funding agreements 
        negotiated between the Secretary and an Indian tribe shall 
        include a provision authorizing the Secretary to reassume 
        operation of a program, service, function, or activity (or 
        portions thereof) and associated funding if there is a specific 
        finding relative to that program, service, function, or 
        activity (or portion thereof) of--
                  ``(i) imminent endangerment of the public health 
                caused by an act or omission of the Indian tribe, and 
                the imminent endangerment arises out of a failure to 
                carry out the compact or funding agreement; or
                  ``(ii) gross mismanagement with respect to funds 
                transferred to a tribe by a compact or funding 
                agreement, as determined by the Secretary in 
                consultation with the Inspector General, as 
                appropriate.
          ``(B) The Secretary shall not reassume operation of a 
        program, service, function, or activity (or portions thereof) 
        unless (i) the Secretary has first provided written notice and 
        a hearing on the record to the Indian tribe; and (ii) the 
        Indian tribe has not taken corrective action to remedy the 
        imminent endangerment to public health or gross mismanagement.
          ``(C) Notwithstanding subparagraph (B), the Secretary may, 
        upon written notification to the tribe, immediately reassume 
        operation of a program, service, function, or activity (or 
        portion thereof) and associated funding if (i) the Secretary 
        makes a finding of imminent substantial and irreparable 
        endangerment of the public health caused by an act or omission 
        of the Indian tribe; and (ii) the endangerment arises out of a 
        failure to carry out the compact or funding agreement. If the 
        Secretary reassumes operation of a program, service, function, 
        or activity (or portion thereof) under this subparagraph, the 
        Secretary shall provide the tribe with a hearing on the record 
        not later than 10 days after such reassumption.
          ``(D) In any hearing or appeal involving a decision to 
        reassume operation of a program, service, function, or activity 
        (or portion thereof), the Secretary shall have the burden of 
        proof of demonstrating by clear and convincing evidence the 
        validity of the grounds for the reassumption.
  ``(b) Final Offer.--In the event the Secretary and a participating 
Indian tribe are unable to agree, in whole or in part, on the terms of 
a compact or funding agreement (including funding levels), the Indian 
tribe may submit a final offer to the Secretary. Not more than 45 days 
after such submission, or within a longer time agreed upon by the 
Indian tribe, the Secretary shall review and make a determination with 
respect to such offer. In the absence of a timely rejection of the 
offer, in whole or in part, made in compliance with subsection (c), the 
offer shall be deemed agreed to by the Secretary.
  ``(c) Rejection of Final Offers.--If the Secretary rejects an offer 
made under subsection (b) (or one or more provisions or funding levels 
in such offer), the Secretary shall provide--
          ``(1) a timely written notification to the Indian tribe that 
        contains a specific finding that clearly demonstrates, or that 
        is supported by a controlling legal authority, that--
                  ``(A) the amount of funds proposed in the final offer 
                exceeds the applicable funding level to which the 
                Indian tribe is entitled under this title;
                  ``(B) the program, function, service, or activity (or 
                portion thereof) that is the subject ofthe final offer 
is an inherent Federal function that cannot legally be delegated to an 
Indian tribe;
                  ``(C) the Indian tribe cannot carry out the program, 
                function, service, or activity (or portion thereof) in 
                a manner that would not result in significant danger or 
                risk to the public health; or
                  ``(D) the tribe is not eligible to participate in 
                self-governance under section 503;
          ``(2) technical assistance to overcome the objections stated 
        in the notification required by paragraph (1);
          ``(3) the Indian tribe with a hearing on the record with the 
        right to engage in full discovery relevant to any issue raised 
        in the matter and the opportunity for appeal on the objections 
        raised, provided that the Indian tribe may, in lieu of filing 
        such appeal, directly proceed to initiate an action in a 
        Federal district court pursuant to section 110(a); and
          ``(4) the Indian tribe with the option of entering into the 
        severable portions of a final proposed compact or funding 
        agreement, or provision thereof, (including lesser funding 
        amount, if any), that the Secretary did not reject, subject to 
        any additional alterations necessary to conform the compact or 
        funding agreement to the severed provisions. If an Indian tribe 
        exercises the option specified herein, it shall retain the 
        right to appeal the Secretary's rejection under this section, 
        and paragraphs (1), (2), and (3) shall only apply to that 
        portion of the proposed final compact, funding agreement or 
        provision thereof that was rejected by the Secretary.
  ``(d) Burden of Proof.--With respect to any hearing or appeal or 
civil action conducted pursuant to this section, the Secretary shall 
have the burden of demonstrating by clear and convincing evidence the 
validity of the grounds for rejecting the offer (or a provision 
thereof) made under subsection (b).
  ``(e) Good Faith.--In the negotiation of compacts and funding 
agreements the Secretary shall at all times negotiate in good faith to 
maximize implementation of the self-governance policy. The Secretary 
shall carry out this title in a manner that maximizes the policy of 
tribal self-governance, consistent with section 3.
  ``(f) Savings.--To the extent that programs, functions, services, or 
activities (or portions thereof) carried out by Indian tribes under 
this title reduce the administrative or other responsibilities of the 
Secretary with respect to the operation of Indian programs and result 
in savings that have not otherwise been included in the amount of 
tribal shares and other funds determined under section 508(c), the 
Secretary shall make such savings available to the Indian tribes, 
inter-tribal consortia, or tribal organizations for the provision of 
additional services to program beneficiaries in a manner equitable to 
directly served, contracted, and compacted programs.
  ``(g) Trust Responsibility.--The Secretary is prohibited from 
waiving, modifying, or diminishing in any way the trust responsibility 
of the United States with respect to Indian tribes and individual 
Indians that exists under treaties, Executive orders, other laws, or 
court decisions.
  ``(h) Decisionmaker.--A decision that constitutes final agency action 
and relates to an appeal within the Department of Health and Human 
Services conducted under subsection (c) shall be made either--
          ``(1) by an official of the Department who holds a position 
        at a higher organizational level within the Department than the 
        level of the departmental agency in which the decision that is 
        the subject of the appeal was made; or
          ``(2) by an administrative judge.

``SEC. 508. TRANSFER OF FUNDS.

  ``(a) In General.--Pursuant to the terms of any compact or funding 
agreement entered into under this title, the Secretary shall transfer 
to the Indian tribe all funds provided for in the funding agreement, 
pursuant to subsection (c), and provide funding for periods covered by 
joint resolution adopted by Congress making continuing appropriations, 
to the extent permitted by such resolutions. In any instance where a 
funding agreement requires an annual transfer of funding to be made at 
the beginning of a fiscal year, or requires semiannual or other 
periodic transfers of funding to be made commencing at the beginning of 
a fiscal year, the first such transfer shall be made not later than 10 
days after the apportionment of such funds by the Office of Management 
and Budget to the Department, unless the funding agreement provides 
otherwise.
  ``(b) Multiyear Funding.--The Secretary is hereby authorized to 
employ, upon tribal request, multiyear funding agreements, and 
references in this title to funding agreements shall include such 
multiyear agreements.
  ``(c) Amount of Funding.--The Secretary shall provide funds under a 
funding agreement under this title in an amount equal to the amount 
that the Indian tribe would have been entitled to receive under self-
determination contracts under this Act, including amounts for direct 
program costs specified under section 106(a)(1) and amounts for 
contract support costs specified under sections 106(a)(2), (a)(3), 
(a)(5), and (a)(6), including any funds that are specifically or 
functionally related to the provision by the Secretary of services and 
benefits to the Indian tribe or its members, all without regard to the 
organizational level within the Department where such functions are 
carried out.
  ``(d) Prohibitions.--The Secretary is expressly prohibited from--
          ``(1) failing or refusing to transfer to an Indian tribe its 
        full share of any central, headquarters, regional, area, or 
        service unit office or other funds due under this Act, except 
        as required by Federal law;
          ``(2) withholding portions of such funds for transfer over a 
        period of years; and
          ``(3) reducing the amount of funds required herein--
                  ``(A) to make funding available for self-governance 
                monitoring or administration by the Secretary;
                  ``(B) in subsequent years, except pursuant to--
                          ``(i) a reduction in appropriations from the 
                        previous fiscal year for the program or 
                        function to be included in a compact or funding 
                        agreement;
                          ``(ii) a congressional directive in 
                        legislation or accompanying report;
                          ``(iii) a tribal authorization;
                          ``(iv) a change in the amount of pass-through 
                        funds subject to the terms of the funding 
                        agreement; or
                          ``(v) completion of a project, activity, or 
                        program for which such funds were provided;
                  ``(C) to pay for Federal functions, including Federal 
                pay costs, Federal employee retirement benefits, 
                automated data processing, technical assistance, and 
                monitoring of activities under this Act; or
                  ``(D) to pay for costs of Federal personnel displaced 
                by self-determination contracts under this Act or self-
                governance;
except that such funds may be increased by the Secretary if necessary 
to carry out this Act or as provided in section 105(c)(2).
  ``(e) Other Resources.--In the event an Indian tribe elects to carry 
out a compact or funding agreement with the use of Federal personnel, 
Federal supplies (including supplies available from Federal warehouse 
facilities), Federal supply sources (including lodging, airline 
transportation, and other means of transportation including the use of 
interagency motor pool vehicles) or other Federal resources (including 
supplies, services, and resources available to the Secretary under any 
procurement contracts in which the Department is eligible to 
participate), the Secretary is authorized to transfer such personnel, 
supplies, or resources to the Indian tribe.
  ``(f) Reimbursement to Indian Health Service.--With respect to 
functions transferred by the Indian Health Service to an Indian tribe, 
the Indian Health Service is authorized to provide goods and services 
to the Indian tribe, on a reimbursable basis, including payment in 
advance with subsequent adjustment, and the reimbursements received 
therefrom, along with the funds received from the Indian tribe pursuant 
to this title, may be credited to the same or subsequent appropriation 
account which provided the funding, such amounts to remain available 
until expended.
  ``(g) Prompt Payment Act.--Chapter 39 of title 31, United States 
Code, shall apply to the transfer of funds due under a compact or 
funding agreement authorized under this title.
  ``(h) Interest or Other Income on Transfers.--An Indian tribe is 
entitled to retain interest earned on any funds paid under a compact or 
funding agreement to carry out governmental or health purposes and such 
interest shall not diminish the amount of funds the Indian tribe is 
authorized to receive under its funding agreement in the year the 
interest is earned or in any subsequent fiscal year. Funds transferred 
under this Act shall be managed using the prudent investment standard.
  ``(i) Carryover of Funds.--All funds paid to an Indian tribe in 
accordance with a compact or funding agreement shall remain available 
until expended. In the event that an Indian tribe elects to carry over 
funding from one year to the next, suchcarryover shall not diminish the 
amount of funds the Indian tribe is authorized to receive under its 
funding agreement in that or any subsequent fiscal year.
  ``(j) Program Income.--All medicare, medicaid, or other program 
income earned by an Indian tribe shall be treated as supplemental 
funding to that negotiated in the funding agreement and the Indian 
tribe may retain all such income and expend such funds in the current 
year or in future years except to the extent that the Indian Health 
Care Improvement Act (25 U.S.C. 1601 et seq.) provides otherwise for 
medicare and medicaid receipts, and such funds shall not result in any 
offset or reduction in the amount of funds the Indian tribe is 
authorized to receive under its funding agreement in the year the 
program income is received or for any subsequent fiscal year.
  ``(k) Limitation of Costs.--An Indian tribe shall not be obligated to 
continue performance that requires an expenditure of funds in excess of 
the amount of funds transferred under a compact or funding agreement. 
If at any time the Indian tribe has reason to believe that the total 
amount provided for a specific activity in the compact or funding 
agreement is insufficient the Indian tribe shall provide reasonable 
notice of such insufficiency to the Secretary. If the Secretary does 
not increase the amount of funds transferred under the funding 
agreement, the Indian tribe may suspend performance of the activity 
until such time as additional funds are transferred.

``SEC. 509. CONSTRUCTION PROJECTS.

  ``(a) In General.--Indian tribes participating in tribal self-
governance may carry out construction projects under this title if they 
elect to assume all Federal responsibilities under the National 
Environmental Policy Act of 1969, the Historic Preservation Act, and 
related provisions of law that would apply if the Secretary were to 
undertake a construction project, by adopting a resolution (1) 
designating a certifying officer to represent the Indian tribe and to 
assume the status of a responsible Federal official under such laws, 
and (2) accepting the jurisdiction of the Federal court for the purpose 
of enforcement of the responsibilities of the responsible Federal 
official under such environmental laws.
  ``(b) Negotiations.--Construction project proposals shall be 
negotiated pursuant to the statutory process in section 105(m) and 
resulting construction project agreements shall be incorporated into 
funding agreements as addenda.
  ``(c) Codes and Standards.--The Indian tribe and the Secretary shall 
agree upon and specify appropriate buildings codes and architectural/
engineering standards (including health and safety) which shall be in 
conformity with nationally recognized standards for comparable 
projects.
  ``(d) Responsibility for Completion.--The Indian tribe shall assume 
responsibility for the successful completion of the construction 
project in accordance with the negotiated construction project 
agreement.
  ``(e) Funding.--Funding for construction projects carried out under 
this title shall be included in funding agreements as annual advance 
payments, with semiannual payments at the option of the Indian tribe. 
Annual advance and semiannual payment amounts shall be determined based 
on mutually agreeable project schedules reflecting work to be 
accomplished within the advance payment period, work accomplished and 
funds expended in previous payment periods, and the total prior 
payments. The Secretary shall include associated project contingency 
funds with each advance payment installment. The Indian tribe shall be 
responsible for the management of the contingency funds included in 
funding agreements.
  ``(f) Approval.--The Secretary shall have at least one opportunity to 
approve project planning and design documents prepared by the Indian 
tribe in advance of construction of the facilities specified in the 
scope of work for each negotiated construction project agreement or 
amendment thereof which results in a significant change in the original 
scope of work. The Indian tribe shall provide the Secretary with 
project progress and financial reports not less than semiannually. The 
Secretary may conduct on-site project oversight visits semiannually or 
on an alternate schedule agreed to by the Secretary and the Indian 
tribe.
  ``(g) Wages.--All laborers and mechanics employed by contractors and 
subcontractors in the construction, alteration, or repair, including 
painting or decorating of building or other facilities in connection 
with construction projects undertaken by self-governance Indian tribes 
under this Act, shall be paid wages at not less than those prevailing 
wages on similar construction in the locality as determined by the 
Secretary of Labor in accordance with the Davis-Bacon Act of March 3, 
1931 (46 Stat. 1494). With respect to construction, alteration, or 
repair work to which the Act of March 3, 1921, is applicable under the 
terms of this section, the Secretary of Labor shall have the authority 
and functions set forth in Reorganization Plan Numbered 14, of 1950, 
and section 2 of the Act of June 13, 1934 (48 Stat. 948).
  ``(h) Application of Other Laws.--Unless otherwise agreed to by the 
Indian tribe, no provision of the Office of Federal Procurement Policy 
Act, the Federal Acquisition Regulations issued pursuant thereto, or 
any other law or regulation pertaining to Federal procurement 
(including Executive orders) shall apply to any construction project 
conducted under this title.

``SEC. 510. FEDERAL PROCUREMENT LAWS AND REGULATIONS.

  ``Notwithstanding any other provision of law, unless expressly agreed 
to by the participating Indian tribe, the compacts and funding 
agreements entered into under this title shall not be subject to 
Federal contracting or cooperative agreement laws and regulations 
(including Executive orders and the regulations relating to procurement 
issued by the Secretary), except to the extent that such laws expressly 
apply to Indian tribes.

``SEC. 511. CIVIL ACTIONS.

  ``(a) Contract Defined.--For the purposes of section 110, the term 
`contract' shall include compacts and funding agreements entered into 
under this title.
  ``(b) Applicability of Certain Laws.--Section 2103 of the Revised 
Statutes of the United States Code (25 U.S.C. 81) and section 16 of the 
Act of June 18, 1934 (25 U.S.C. 476), shall not apply to attorney and 
other professional contracts entered into by Indian tribes 
participating in self-governance under this title.
  ``(c) References.--All references in the Indian Self-Determination 
and Education Assistance Act (25 U.S.C. 450 et seq.) to section 1 of 
the Act of June 26, 1936 (25 U.S.C. 81) are hereby deemed to include 
section 1 of the Act of July 3, 1952 (25 U.S.C. 82a).

``SEC. 512. FACILITATION.

  ``(a) Secretarial Interpretation.--Except as otherwise provided by 
law, the Secretary shall interpret all Federal laws, Executive orders 
and regulations in a manner that will facilitate--
          ``(1) the inclusion of programs, services, functions, and 
        activities (or portions thereof) and funds associated 
        therewith, in the agreements entered into under this section;
          ``(2) the implementation of compacts and funding agreements 
        entered into under this title; and
          ``(3) the achievement of tribal health goals and objectives.
  ``(b) Regulation Waiver.--
          ``(1) An Indian tribe may submit a written request to waive 
        application of a regulation promulgated under this Act for a 
        compact or funding agreement entered into with the Indian 
        Health Service under this title, to the Secretary identifying 
        the applicable Federal regulation under this Act sought to be 
        waived and the basis for the request.
          ``(2) Not later than 90 days after receipt by the Secretary 
        of a written request by an Indian tribe to waive application of 
        a regulation under this Act for a compact or funding agreement 
        entered into under this title, the Secretary shall either 
        approve or deny the requested waiver in writing. A denial may 
        be made only upon a specific finding by the Secretary that 
        identified language in the regulation may not be waived because 
        such waiver is prohibited by Federal law. A failure to approve 
        or deny a waiver request not later than 90 days after receipt 
        shall be deemed an approval of such request. The Secretary's 
        decision shall be final for the Department.
  ``(c) Access to Federal Property.--In connection with any compact or 
funding agreement executed pursuant to this title or an agreement 
negotiated under the Tribal Self-Governance Demonstration Project 
established under title III, as in effect before the enactment of the 
Tribal Self-Governance Amendments of 1999, upon the request of an 
Indian tribe, the Secretary--
          ``(1) shall permit an Indian tribe to use existing school 
        buildings, hospitals, and other facilities and all equipment 
        therein or appertaining thereto and other personal property 
        owned by the Government within the Secretary's jurisdiction 
        under such terms and conditions as may be agreed upon by the 
        Secretary and the tribe for their use and maintenance;
          ``(2) may donate to an Indian tribe title to any personal or 
        real property found to be excess to the needs of any agency of 
        the Department, or the General Services Administration, except 
        that--
                  ``(A) subject to the provisions of subparagraph (B), 
                title to property and equipment furnished by the 
                Federal Government for use in the performance of the 
                compact or funding agreement or purchased with funds 
                under anycompact or funding agreement shall, unless 
otherwise requested by the Indian tribe, vest in the appropriate Indian 
tribe;
                  ``(B) if property described in subparagraph (A) has a 
                value in excess of $5,000 at the time of retrocession, 
                withdrawal, or reassumption, at the option of the 
                Secretary upon the retrocession, withdrawal, or 
                reassumption, title to such property and equipment 
                shall revert to the Department of Health and Human 
                Services; and
                  ``(C) all property referred to in subparagraph (A) 
                shall remain eligible for replacement, maintenance, and 
                improvement on the same basis as if title to such 
                property were vested in the United States; and
          ``(3) shall acquire excess or surplus Government personal or 
        real property for donation to an Indian tribe if the Secretary 
        determines the property is appropriate for use by the Indian 
        tribe for any purpose for which a compact or funding agreement 
        is authorized under this title.
  ``(d) Matching or Cost-Participation Requirement.--All funds provided 
under compacts, funding agreements, or grants made pursuant to this 
Act, shall be treated as non-Federal funds for purposes ofmeeting 
matching or cost participation requirements under any other Federal or 
non-Federal program.
  ``(e) State Facilitation.--States are hereby authorized and 
encouraged to enact legislation, and to enter into agreements with 
Indian tribes to facilitate and supplement the initiatives, programs, 
and policies authorized by this title and other Federal laws benefiting 
Indians and Indian tribes.
  ``(f) Rules of Construction.--Each provision of this title and each 
provision of a compact or funding agreement shall be liberally 
construed for the benefit of the Indian tribe participating in self-
governance and any ambiguity shall be resolved in favor of the Indian 
tribe.

``SEC. 513. BUDGET REQUEST.

  ``(a) In General.--The President shall identify in the annual budget 
request submitted to the Congress under section 1105 of title 31, 
United States Code, all funds necessary to fully fund all funding 
agreements authorized under this title, including funds specifically 
identified to fund tribal base budgets. All funds so appropriated shall 
be apportioned to the Indian Health Service. Such funds shall be 
provided to the Office of Tribal Self-Governance which shall be 
responsible for distribution of all funds provided under section 505. 
Nothing in this provision shall be construed to authorize the Indian 
Health Service to reduce the amount of funds that a self-governance 
tribe is otherwise entitled to receive under its funding agreement or 
other applicable law, whether or not such funds are made available to 
the Office of Tribal Self-Governance under this section.
  ``(b) Present Funding; Shortfalls.--In such budget request, the 
President shall identify the level of need presently funded and any 
shortfall in funding (including direct program and contract support 
costs) for each Indian tribe, either directly by the Secretary, under 
self-determination contracts, or under compacts and funding agreements 
authorized under this title.

``SEC. 514. REPORTS.

  ``(a) Annual Report.--Not later than January 1 of each year after the 
date of the enactment of this title, the Secretary shall submit to the 
Committee on Resources of the House of Representatives and the 
Committee on Indian Affairs of the Senate a written report regarding 
the administration of this title. Such report shall include a detailed 
analysis of the level of need being presently funded or unfunded for 
each Indian tribe, either directly by the Secretary, under self-
determination contracts under title I, or under compacts and funding 
agreements authorized under this Act. In compiling reports pursuant to 
this section, the Secretary may not impose any reporting requirements 
on participating Indian tribes or tribal organizations, not otherwise 
provided in this Act.
  ``(b) Contents.--The report shall be compiled from information 
contained in funding agreements, annual audit reports, and Secretarial 
data regarding the disposition of Federal funds and shall--
          ``(1) identify the relative costs and benefits of self-
        governance;
          ``(2) identify, with particularity, all funds that are 
        specifically or functionally related to the provision by the 
        Secretary of services and benefits to self-governance Indian 
        tribes and their members;
          ``(3) identify the funds transferred to each self-governance 
        Indian tribe and the corresponding reduction in the Federal 
        bureaucracy;
          ``(4) identify the funding formula for individual tribal 
        shares of all headquarters funds, together with the comments of 
        affected Indian tribes or tribal organizations, developed under 
        subsection (c);
          ``(5) identify amounts expended in the preceding fiscal year 
        to carry out inherent Federal functions, including an 
        identification of those functions by type and location;
          ``(6) contain a description of the method or methods (or any 
        revisions thereof) used to determine the individual tribal 
        share of funds controlled by all components of the Indian 
        Health Service (including funds assessed by any other Federal 
        agency) for inclusion in self-governance compacts or funding 
        agreements;
          ``(7) prior to being submitted to Congress, be distributed to 
        the Indian tribes for comment, such comment period to be for no 
        less than 30 days; and
          ``(8) include the separate views and comments of the Indian 
        tribes or tribal organizations.
  ``(c) Report on Fund Distribution Method.--Not later than 180 days 
after the date of enactment of this title, the Secretary shall, after 
consultation with Indian tribes, submit a written report to the 
Committee on Resources of the House of Representatives and the 
Committee on Indian Affairs of the Senate which describes the method or 
methods used to determine the individual tribal share of funds 
controlled by all components of the Indian Health Service (including 
funds assessed by any other Federal agency) for inclusion in self-
governance compacts or funding agreements.

``SEC. 515. DISCLAIMERS.

  ``(a) No Funding Reduction.--Nothing in this title shall be construed 
to limit or reduce in any way the funding for any program, project, or 
activity serving anIndian tribe under this or other applicable Federal 
law. Any Indian tribe that alleges that a compact or funding agreement 
is in violation of this section may apply the provisions of section 
110.
  ``(b) Federal Trust and Treaty Responsibilities.--Nothing in this Act 
shall be construed to diminish in any way the trust responsibility of 
the United States to Indian tribes and individual Indians that exists 
under treaties, Executive orders, or other laws and court decisions.
  ``(c) Tribal Employment.--For purposes of section 2(2) of the Act of 
July 5, 1935 (49 Stat. 450, chapter 372) (commonly known as the 
National Labor Relations Act), an Indian tribe carrying out a self-
determination contract, compact, annual funding agreement, grant, or 
cooperative agreement under this Act shall not be considered an 
employer.
  ``(d) Obligations of the United States.--The Indian Health Service 
under this Act shall neither bill nor charge those Indians who may have 
the economic means to pay for services, nor require any Indian tribe to 
do so.

``SEC. 516. APPLICATION OF OTHER SECTIONS OF THE ACT.

  ``(a) Mandatory Application.--All provisions of sections 5(b), 6, 7, 
102(c) and (d), 104, 105(k) and (l), 106(a) through (k), and 111 of 
this Act and section 314 of Public Law 101-512 (coverage under the 
Federal Tort Claims Act), to the extent not in conflict with this 
title, shall apply to compacts and funding agreements authorized by 
this title.
  ``(b) Discretionary Application.--At the request of a participating 
Indian tribe, any other provision of title I, to the extent such 
provision is not in conflict with this title, shall be made a part of a 
funding agreement or compact entered into under this title. The 
Secretary is obligated to include such provision at the option of the 
participating Indian tribe or tribes. If such provision is incorporated 
it shall have the same force and effect as if it were set out in full 
in this title. In the event an Indian tribe requests such incorporation 
at the negotiation stage of a compact or funding agreement, such 
incorporation shall be deemed effective immediately and shall control 
the negotiation and resulting compact and funding agreement.

``SEC. 517. REGULATIONS.

  ``(a) In General.--
          ``(1) Not later than 90 days after the date of enactment of 
        this title, the Secretary shall initiate procedures under 
        subchapter III of chapter 5 of title 5, United States Code, to 
        negotiate and promulgate such regulations as are necessary to 
        carry out this title.
          ``(2) Proposed regulations to implement this title shall be 
        published in the Federal Register by the Secretary no later 
        than 1 year after the date of enactment of this title.
          ``(3) The authority to promulgate regulations under this 
        title shall expire 21 months after the date of enactment of 
        this title.
  ``(b) Committee.--A negotiated rulemaking committee established 
pursuant to section 565 of title 5, United States Code, to carry out 
this section shall have asits members only Federal and tribal 
government representatives, a majority of whom shall be nominated by 
and be representatives of Indian tribes with funding agreements under 
this Act, and the Committee shall confer with, and accommodate 
participation by, representatives of Indian tribes, inter-tribal 
consortia, tribal organizations, and individual tribal members.
  ``(c) Adaptation of Procedures.--The Secretary shall adapt the 
negotiated rulemaking procedures to the unique context of self-
governance and the government-to-government relationship between the 
United States and Indian tribes.
  ``(d) Effect.--The lack of promulgated regulations shall not limit 
the effect of this title.
  ``(e) Effect of Circulars, Policies, Manuals, Guidances, and Rules.--
Unless expressly agreed to by the participating Indian tribe in the 
compact or funding agreement, the participating Indian tribe shall not 
be subject to any agency circular, policy, manual, guidance, or rule 
adopted by the Indian Health Service, except for the eligibility 
provisions of section 105(g).

``SEC. 518. APPEALS.

  ``In any appeal (including civil actions) involving decisions made by 
the Secretary under this title, the Secretary shall have the burden of 
proof of demonstrating by clear and convincing evidence--
          ``(1) the validity of the grounds for the decision made; and
          ``(2) the decision is fully consistent with provisions and 
        policies of this title.

``SEC. 519. AUTHORIZATION OF APPROPRIATIONS.

  ``There are authorized to be appropriated such sums as may be 
necessary to carry out this title.

  ``TITLE VI--TRIBAL SELF-GOVERNANCE--DEPARTMENT OF HEALTH AND HUMAN 
                                SERVICES

``SEC. 601. DEMONSTRATION PROJECT FEASIBILITY.

  ``(a) Study.--The Secretary shall conduct a study to determine the 
feasibility of a Tribal Self-Governance Demonstration Project for 
appropriate programs, services, functions, and activities (or portions 
thereof) of the agency.
  ``(b) Considerations.--When conducting the study, the Secretary shall 
consider--
          ``(1) the probable effects on specific programs and program 
        beneficiaries of such a demonstration project;
          ``(2) statutory, regulatory, or other impediments to 
        implementation of such a demonstration project;
          ``(3) strategies for implementing such a demonstration 
        project;
          ``(4) probable costs or savings associated with such a 
        demonstration project;
          ``(5) methods to assure quality and accountability in such a 
        demonstration project; and
          ``(6) such other issues that may be determined by the 
        Secretary or developed through consultation pursuant to section 
        602.
  ``(c) Report.--Not later than 18 months after the enactment of this 
title, the Secretary shall submit a report to the Committee on 
Resources of the House of Representatives and the Committee on Indian 
Affairs of the Senate. The report shall contain--
          ``(1) the results of the study;
          ``(2) a list of programs, services, functions, and activities 
        (or portions thereof) within the agency which it would be 
        feasible to include in a Tribal Self-Governance Demonstration 
        Project;
          ``(3) a list of programs, services, functions, and activities 
        (or portions thereof) included in the list provided pursuant to 
        paragraph (2) which could be included in a Tribal Self-
        Governance Demonstration Project without amending statutes, or 
        waiving regulations that the Secretary may not waive;
          ``(4) a list of legislative actions required in order to 
        include those programs, services, functions, and activities (or 
        portions thereof) included in the list provided pursuant to 
        paragraph (2) but not included in the list provided pursuant to 
        paragraph (3) in a Tribal Self-Governance Demonstration 
        Project; and
          ``(5) any separate views of tribes and other entities 
        consulted pursuant to section 602 related to the information 
        provided pursuant to paragraph (1) through (4).

``SEC. 602. CONSULTATION.

  ``(a) Study Protocol.--
          ``(1) Consultation with indian tribes.--The Secretary shall 
        consult with Indian tribes to determine a protocol for 
        consultation under subsection (b) prior to consultation under 
        such subsection with the other entities described in such 
        subsection. The protocol shall require, at a minimum, that--
                  ``(A) the government-to-government relationship with 
                Indian tribes forms the basis for the consultation 
                process;
                  ``(B) the Indian tribes and the Secretary jointly 
                conduct the consultations required by this section; and
                  ``(C) the consultation process allow for separate and 
                direct recommendations from the Indian tribes and other 
                entities described in subsection (b).
          ``(2) Opportunity for public comment.--In determining the 
        protocol described in paragraph (1), the Secretary shall 
        publish the proposed protocol and allow a period of not less 
        than 30 days for comment by entities described in subsection 
        (b) and other interested individuals, and shall take comments 
        received into account in determining the final protocol.
  ``(b) Conducting Study.--In conducting the study under this title, 
the Secretary shall consult with Indian tribes, States, counties, 
municipalities, program beneficiaries, and interested public interest 
groups, and may consult with other entities as appropriate.

``SEC. 603. DEFINITIONS.

  ``(a) In General.--For purposes of this title, the Secretary may use 
definitions provided in title V.
  ``(b) Agency.--For purposes of this title, the term `agency' shall 
mean any agency or other organizational unit of the Department of 
Health and Human Services, other than the Indian Health Service.

``SEC. 604. AUTHORIZATION OF APPROPRIATIONS.

  ``There are authorized to be appropriated for fiscal years 2000 and 
2001 such sums as may be necessary to carry out this title. Such sums 
shall remain available until expended.''.

SEC. 5. AMENDMENTS CLARIFYING CIVIL PROCEEDINGS.

  (a) Burden of Proof in District Court Actions.--Section 102(e)(1) of 
the Indian Self-Determination and Education Assistance Act (25 U.S.C. 
450f(e)(1)) is amended by inserting after ``subsection (b)(3)'' the 
following: ``or any civil action conducted pursuant to section 
110(a)''.
  (b) Effective Date.--The amendment made by this section shall apply 
to any proceedings commenced after October 25, 1994.

SEC. 6. SPEEDY ACQUISITION OF GOODS, SERVICES, OR SUPPLIES.

  Section 105(k) of the Indian Self-Determination and Education 
Assistance Act (25 U.S.C. 450j(k)) is amended--
          (1) by striking ``carrying out a contract'' and all that 
        follows through ``shall be eligible'' and inserting the 
        following: ``or Indian tribe shall be deemed an executive 
        agency and a part of the Indian Health Service, and the 
        employees of the tribal organization or the Indian tribe, as 
        the case may be, shall be eligible''; and
          (2) by adding at the end thereof the following: ``At the 
        request of an Indian tribe, the Secretary shall enter into an 
        agreement for the acquisition, on behalf of the Indian tribe, 
        of any goods, services, or supplies available to the Secretary 
        from the General Services Administration or other Federal 
        agencies that are not directly available to the Indian tribe 
        under this section or any other Federal law, including 
        acquisitions from prime vendors. All such acquisitions shall be 
        undertaken through the most efficient and speedy means 
        practicable, including electronic ordering arrangements.

SEC. 7. PATIENT RECORDS.

  Section 105 of the Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450j) is amended by adding at the end the following new 
subsection:
  ``(o) At the option of a tribe or tribal organization, patient 
records may be deemed to be Federal records under the Federal Records 
Act of 1950 for the limited purposes of making such records eligible 
for storage by Federal Records Centers to the same extent and in the 
same manner as other Department of Health and Human Services patient 
records. Patient records that are deemed to be Federal records under 
the Federal Records Act of 1950 pursuant to this subsection shall not 
be considered Federal records for the purposes of chapter 5 of title 5, 
United States Code.''.

SEC. 8. REPEAL.

  Title III of the Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450f note) is hereby repealed.

SEC. 9. SAVINGS PROVISION.

  Funds appropriated for title III of the Indian Self-Determination and 
Education Assistance Act (25 U.S.C. 450f note) shall be available for 
use under title V of such Act.

SEC. 10. EFFECTIVE DATE.

  Except as otherwise provided, the provisions of this Act shall take 
effect on the date of the enactment of this Act.

                          Purpose of the Bill

    The purpose of H.R. 1167 is to amend the Indian Self-
Determination and Education Assistance Act to provide for 
further self-governance by Indian tribes, and for other 
purposes.

                  Background and Need for Legislation

    H.R. 1167 would create a new title in the 1975 Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450 et 
seq.). The 1975 Act allows Indian tribes to contract for or 
take over the administration and operation of certain federal 
programs which provide services to Indian tribes. Title III of 
the Act establishes a Self-Governance Demonstration Project 
that allows for large-scale tribal self-governance compacts and 
funding agreements on a ``demonstration'' basis. To date, 42 
separate compacts, representing 57 individual funding 
agreements with tribes, have already been negotiated.
    The new title created by H.R. 1167 would make this 
authority permanent for programs contracted for within the 
Indian Health Service (IHS). Under H.R. 1167, Indian and Alaska 
Native tribes would be able to contract for the operation, 
control, and redesign of various IHS activities on a permanent 
basis. In short, what was a demonstration project would become 
a permanent IHS Self-Governance program. Pursuant to H.R. 1167, 
tribes which have already contracted for IHS activities would 
continue under the provisions of their contracts while an 
additional 50 new tribes would be selected each year to enter 
into contracts.
    H.R. 1167 also allows for a feasibility study regarding the 
execution of tribal Self-Governance compacts and funding 
agreements for Indian-related programs outside the IHS but 
within the Department of Health and Human Services on a 
demonstration project basis.

                            Committee Action

    H.R. 1167 was introduced on March 17, 1999, by Congressman 
George Miller (D-CA) and was cosponsored by Congressman Don 
Young (R-AK). The bill was referred to the Committee on 
Resources. On June 9, 1999, the Full Committee on Resources met 
to consider H.R. 1833. Mr. Miller offered an amendment in the 
nature of a substitute. The amendment inserted the phrase 
``regulations relating to procurement issued by the Secretary'' 
into Section 510 to clarify that the section is only referring 
to procurement regulations. The amendment also clarified that 
Indian tribes administering their own health programs are 
eligible to receive reduced rate pharmaceuticals and that 
patient records are not subject to the Freedom of Information 
Act. The amendment was adopted by voice vote. The bill as 
amended was then ordered favorably reported to the House of 
Representative by voice vote.

                      Section-by-Section Analysis


Section 1. Short title

    This provision sets forth the short title, the Tribal Self-
Governance Act Amendments of 1999.

Section 2. Findings

    This provision sets forth the findings of Congress which, 
among other things, reaffirm the sovereignty of Indian tribes 
and the unique government-to-government relationship between 
the United States and Indian tribes. The findings make clear 
that the federal government has failed to fully meet its trust 
responsibility and to satisfy its obligations under treaties 
and other laws. The findings also explain that Congress has 
concluded that self-governance is an effective mechanism to 
implement and strengthen the federal policy of government-to-
government relations with Indian tribes by transferring to 
Indian tribes full control and funding for federal programs, 
functions, services, or activities, or portions thereof.
    Throughout this bill, but particularly in the Findings and 
Declaration of Policy sections, the phrase ``under treaties'' 
is used in describing the United States' trust obligation to 
Indian tribes and individuals. This provision is intended to 
explain that much of the federal-Indian relationship is 
predicated on a government-to-government relationship as 
reflected in the treaties, which are contractual relationships 
between governments. Treaties are a significant part of the 
legal relationship between Indian tribes and the United States. 
Self-governance, by its use of compacts, another traditional 
contracting device used between governments, is designed to 
honor the government-to-government relationship and remind the 
parties to these agreements of the historical basis for their 
relationship.

Section 3. Declaration of policy

    This section states Congress' policy to permanently 
establish and implement Tribal self-governance within the 
Department of Health and Human Services with the full 
cooperation of its agencies. Among the key policy objectives 
Congress seeks to achieve through the self-governance program 
are to: (1) maintain and continue the United States' unique 
relationship with Indian tribes; (2) allow Indian tribes the 
flexibility to choose whether they wish to participate in self-
governance; (3) ensure the continuation and fulfillment of the 
United States' trust responsibility and other responsibilities 
towards Indian tribes that are contained in treaties and other 
laws; (4) permit a transition to tribal control and authority 
over programs, functions, services, or activities (or portions 
thereof); and (5) provide a corresponding parallel reduction in 
the federal bureaucracy.

Section 4. Tribal self governance

    This section sets out the substantive provisions of the 
Self-Governance program in the Indian Health Service (HHS), 
added as a new Title V of the Indian Self-Determination and 
Education Assistance Act (25 U.S.C. 450 et seq.). The following 
description refers to the new sections of Title V:
            Section 501. Establishment
    This provision directs the Secretary of HHS to establish a 
permanent Tribal Self-Governance Program in the Indian Health 
Service.
            Section 502. Definitions
    Subsection (a)(1) defines ``construction project'' as an 
undertaking described in a ``construction project agreement.''
    Subsection (a)(2) defines ``construction project 
agreement'' as a negotiated agreement which includes at a 
minimum: start and completion of dates; scope of work; party 
responsibilities; environmental considerations; identifies 
owner and operations/maintenance entity; a budget; payment 
process; and duration of the agreement.
    Subsection (a)(3) defines ``inherent federal functions''. 
Inherent federal functions are functions which the Executive 
Branch cannot by law delegate to other branches of governments, 
or to non-governmental entities. This definition is consistent 
with the Department of the Interior Solicitor's Memorandum of 
May 17, 1996, entitled ``Inherently Federal Functions under the 
Tribal Self-Governance Act of 1994.'' It is the Committee's 
understanding that this definition recognizes that there are 
differences between departmental and agency functions and those 
may be analyzed on a case-by-case basis. It is important to 
note that, in the tribal procurement context, there is another 
factor the Committee has considered--when the federal 
government is returning tribal governmental powers and 
functions that are inherent in tribal governmental status (such 
as those possessed by tribes before the establishment of the 
federal Indian bureaucracy), the scope of allowable transfers 
is broader than in the transfer of federal governmental powers 
to private or other governmental entities.
    Subsection (a)(4) defines ``inter-tribal consortium''. The 
Committee notes that during the Title III Demonstration 
Project, the IHS authorized intertribal consortia, such as the 
co-signers to the Alaska Tribal Health Compact, to participate 
in the Project and that participation has had great success. 
The definition of ``inter-tribal consortium'' is intended to 
include ``tribal organizations'' as that term is defined in 
Section 4(l) of the Indian Self-Determination Act, Public Law 
93-638. This would include consortia such as those involved in 
the Alaska Tribal Health Consortium. It is the Committee's 
intent that inter-tribal consortia and tribal organizations 
shall count as one tribe for purposes of the 50 tribe per year 
limitation contained in new Section 503(a).
    Subsection (a)(5) provides a definition of ``gross 
mismanagement.'' The Committee has added this definition 
pursuant to the Department's request and tribal agreement. The 
inclusion of this term is to govern one of the criteria that 
the Secretary is to consider in the reassumption of a tribally-
operated program. The Secretary will be given the authority to 
reassume programs that imminently endanger the public health 
where the danger arises out of a compact or funding agreement 
violation. The Committee believes that the inclusion of a 
performance standard, in this case gross mismanagement, is also 
an appropriate grounds for reassumption. Gross mismanagement is 
defined as a significant, clear, and convincing violation of 
compact, funding agreement, regulatory or statutory 
requirements related to the transfer of self-governance funds 
to the tribe that results in a significant reduction of funds 
to the tribe's self-governance program. The Committee's 
definition of gross mismanagement is narrowly tailored and will 
require a high degree of proof by the Secretary. The Committee 
is well aware of tribal concerns and agrees that the inclusion 
of this performance standard must not be utilized by the 
Secretary in such a manner as to needlessly impose monitoring 
and auditing requirements that hinder the efficient operation 
of tribal programs. Intrusive and overburdensome monitoring and 
auditing activities are antithetical to the goals of self-
governance.
    Subsection (a)(6) defines ``tribal shares''. This 
definition is consistent with the Title IV rule-making 
committee's determination that residual funds are those 
``necessary to carry out the inherently federal functions that 
must be performed by federal officials if all tribes assume 
responsibilities for all BIA programs.'' 63 Fed. Reg. 7235, 
(Feb. 12, 1998) (Proposed Rule, 25 CFR 1000.91). All funds 
appropriated under the Indian Self-Determination and Education 
Assistance Act are either tribal shares or agency residual.
    Subsection (a)(7) defines ``Secretary'' as the Secretary of 
Health and Human Services.
    Subsection (a)(8) defines ``self-governance'' as the 
program established under this title.
    Section (b) defines ``Indian tribe''. This definition 
enables an Indian tribe to authorize another Indian tribe, 
inter-tribal consortium or tribal organization to participate 
in self-governance on its behalf. The authorized Indian tribe, 
inter-tribal consortium or tribal organization may exercise the 
authorizing Indian tribe's rights as specified by tribal 
resolution.
            Section 503. Selection of participating indian tribes
    This section describes the eligibility criteria that must 
be satisfied by any Indian tribe interested in participating in 
the self-governance program.
    (a) Continuing Participation. All tribes presently 
participating in the Tribal Self-Governance Demonstration 
Project under Title III of the Indian Self-Determination and 
Education Assistance Act may elect to participate in the 
permanent self-governance program. Tribes must do so through 
tribal resolution.
    (b) Additional Participants. (1) This section allows an 
additional 50 tribes a year to participate in self-governance. 
(2) This section allows an Indian tribe that chooses to 
withdraw from an inter-tribal consortium or tribal organization 
to participate in self-governance provided it independently 
meets the eligibility criteria in new Title V. Tribes and 
tribal organizations that withdraw from tribal organizations 
and inter-tribal consortia under this section shall be entitled 
to participate in the permanent program under Section 503 
(b)(2) and such participation shall not be counted against the 
50 tribe a year limitation contained in Section 503(a).
    (c) Applicant Pool. The eligibility criteria for self-
governance tribes are the same as those that applied under 
Title IV, the permanent Department of the Interior Self-
Governance Program. To participate, an Indian tribe must 
successfully complete a planning phase, must request 
participation in the program through a resolution or official 
action of the governing body, and must have demonstrated 
financial stability and financial management capability for the 
past three years. Proof of no material audit exceptions in the 
tribe's self determination contracts or self-governance funding 
agreements is conclusive proof of such qualification. The 
Committee notes that the financial examination addressed in 
Subsection 503(c)(3) refers solely to funds managed by the 
tribe under Title I and Title IV of the Indian Self-
Determination and Education Assistance Act. The bill has been 
deliberately crafted to make clear that a tribe's activities in 
other economic endeavors are not subject of the Section 503(c) 
examination. Similarly, the ``budgetary research'' referred to 
in Section 503(d)(1) of the bill requires a tribe to research 
only budgetary issues related to the administration of the 
programs the tribe anticipates transferring to tribal operation 
under self-governance.
    (d) Planning Phase. Every Indian tribe interested in 
participating in self-governance shall complete a planning 
phase prior to participating in the program. The planning phase 
is to include legal and budgetary research and internal tribal 
government planning and organizational preparation. The 
planning phase is to be completed to the satisfaction of the 
tribe.
    (e) Grants. Subject to available appropriations, any Indian 
tribe interested in participating in self-governance is 
eligible to receive a grant to plan for participation in the 
program or to negotiate the terms of a Compact and funding 
agreement.
    (f) Receipt of Grant not Required. This section provides 
that receipt of a grant from HHS is not required to participate 
in the permanent program.
            Section 504. Compacts
    This section authorizes Indian tribes to negotiate Compacts 
with the Secretary and identifies generally the contents of 
Compacts. While the Compact process was not specifically part 
of prior legislative enactment, the Committee understands that 
Compacts have developed as an integral part of self-governance. 
The Committee believes that Compacts serve an important and 
necessary function in establishing government-to-government 
relations, which as noted earlier, is the keystone of modern 
federal Indian policy.
    (a) Compact Required. The Secretary is required to 
negotiate and enter into a written Compact consistent with the 
trust responsibility, treaty obligations and the government-to-
government relationship between the United States and each 
participating tribe.
    (b) Contents. This subsection requires that Compacts state 
the terms of the government-to-government relationship between 
the Indian tribe and the United States. Compacts may only be 
amended by agreement of both parties.
    (c) Existing Compacts. On enactment of Title V, Indian 
tribes have the option of retaining their existing Compacts, or 
any portion of the Compacts that do not contradict the 
provisions of Title V.
    (d) Term and Effective Date. The date of approval and 
execution by the Indian tribe is generally the effective date 
of a Compact, unless otherwise agreed to by the parties. A 
Compact will remain in effect as long as permitted by federal 
law or until terminated by written agreement of the parties, or 
by retrocession or reassumption.
            Section 505. Funding agreements
    This section authorizes Indian tribes to negotiate funding 
agreements with the Secretary and generally identifies the 
contents of those agreements.
    (a) Funding Agreement Required. The Secretary is required 
to negotiate and enter into a written funding agreement 
consistent with the trust responsibility, treaty obligations 
and the government-to-government relationship between the 
United States and each participating tribe.
    (b) Contents. An Indian tribe may include in an funding 
agreement all programs, functions, services, or activities, (or 
portions thereof) that it is authorized to carry out under 
Title I of the Indian Self-Determination and Education 
Assistance Act. Funding agreements may, at the option of the 
Indian tribe, authorize the tribe to plan and carry-out all 
programs, functions, services, or activities, (or portion 
thereof) administered by the Indian Health Service (IHS) that 
are carried out for the benefit of Indians because of their 
status as Indians or where Indian tribes or Indian 
beneficiaries are the primary or significant beneficiaries, as 
set forth in statutes. For each program, function, service, or 
activity (or portion thereof) included in a funding agreement, 
an Indian tribe is entitled to receive its full tribal share of 
funding, including funding for all local, field, service unit, 
area, regional, and central/headquarters or national office 
locations. Available funding includes the Indian tribe's share 
of discretionary IHS competitive grants but not statutorily 
mandated competitive grants.
    The Committee is concerned with the reluctance of the IHS 
to include all available federal health funding in self 
governance funding agreements. We note, as an example, the 
refusal of the IHS to so include the Diabetes Prevention 
Initiative funding. As a result, funding was delayed and undue 
administrative requirements diverted resources from direct 
services. This section is intended to directly remedy this 
situation.
    The Committee has received ample testimony showing the 
benefits of self governance. In 1998, the National Indian 
Health Board recently released its' ``National Study on Self-
Determination and Self-Governance,'' providing empirical 
evidence that self-governance leads to more efficient 
management of tribal health service delivery, especially 
preventive services. This study consistently observed an 
overall improvement in quality of care when tribes operate 
their own health care systems. Less than full funding 
agreements will result in less than maximum use of federal 
resources to address the health care in Indian country. 
Accordingly, this section is to be interpreted broadly by 
affording apresumption in favor of including in a tribe's self-
governance funding agreement any federal funding administered by that 
agency.
    (c) Inclusion in Compact or Funding Agreement. Indians do 
not need to be specifically identified in authorizing 
legislation for a program to be eligible for inclusion in a 
Compact or funding agreement.
    (d) Funding Agreement Terms. Each funding agreement should 
generally set out the programs, functions, services, or 
activities, (or portions thereof) to be performed by the Indian 
tribe, the general budget category assigned to each program, 
function, service, or activity (or portion thereof), the funds 
to be transferred, the time and method of payment and other 
provisions that the parties agree to.
    (e) Subsequent Funding Agreements. Each funding agreement 
remains in full force and effect unless the Secretary receives 
notice from the Indian tribe that it will no longer operate one 
or more of the programs, functions, services, or activities, 
(or portions thereof) included in the funding agreement or 
until a new funding agreement is executed by the parties.
    The Committee is concerned with reports that the IHS has 
been able to use the annual negotiations provisions of Section 
303(a) of the Indian Self-Determination and Education 
Assistance Act to obtain an unfair bargaining advantage during 
negotiations by threatening to suspend application of the Act 
to a tribe if it does not sign an annual funding agreement. 
This subsection is meant to facilitate negotiation between the 
tribes and the IHS on a true government-to-government basis. 
The Committee believes the provision is fair because this 
assures that no act or omission of the federal government 
endangers the health and welfare of tribal members.
    (f) Existing Funding Agreements. Upon enactment of Title V, 
tribes may either retain their existing annual funding 
agreements, or any portion thereof, that do not conflict with 
provisions of Title V, or negotiate new funding agreements that 
conform to Title V.
    (g) Stable Base Funding. An Indian tribe may include a 
stable base budget in its funding agreement. A stable base 
budget contains the tribe's recurring funding amounts and 
provides for transfer of the funds in a predictable and 
consistent manner over a specific period of time. Adjustments 
are made annually only if there are changes in the level of 
funds appropriated by Congress. Non- recurring funds are not 
included and must be negotiated on an annual basis. The 
Committee intends this section to codify the existing agency 
policy guidance on stable base funding.
            Section 506. General provisions.
    (a) Applicability. The provisions in this section may, at 
the tribe's option, be included in a Compact or funding 
agreement.
    (b) Conflicts of Interest. Indian tribes are to assure that 
internal measures are in place to address conflicts of interest 
in the administration of programs, functions, services, or 
activities (or portions thereof).
    (c) Audits. The Single Agency Audit Act applies to Title V 
funding agreements. Indian tribes are required to apply cost 
principles set out in applicable Office of Management and 
Budget (OMB) Circulars, as modified by Section 106 of the 
Indian Self-Determination and Education Assistance Act or by 
any exemptions that may be applicable to future OMB Circulars. 
No other audit or accounting standards are required. Claims 
against Indian tribes by the federal government based on any 
audit of funds received under a Title V funding agreement are 
subject to the provisions of Section 106(f) of the Act.
    (d) Records. An Indian tribe's records are not considered 
federal records for purposes of the Federal Privacy Act, unless 
otherwise stated in the Compact or funding agreement. Indian 
tribes are required to maintain a record keeping system and, 
upon reasonable advance request, provide the Secretary with 
reasonable access to records to enable HHS to meet its minimum 
legal record keeping requirements under the Federal Records 
Act.
    (e) Redesign and Consolidation. An Indian tribe may 
redesign or consolidate programs, functions, services, or 
activities, (or portions thereof) and reallocate or redirect 
funds in any way the Indian tribe considers to be in the best 
interest of the Indian community being served.
    (f) Retrocession. An Indian tribe may retrocede fully or 
partially back to the Secretary any program, function, service, 
or activity (or portion thereof) included in a Compact or 
funding agreement. A retrocession request becomes effective 
within the time frame specified in the Compact or funding 
agreement, one year from the date the request was made, the 
date the funding agreement expires, or any date mutually agreed 
to by the parties, whichever occurs first.
    (g) Withdrawal. An Indian tribe that participates in self-
governance through an inter-tribal consortium or tribal 
organization can withdraw from the consortium or organization. 
The withdrawal becomes effective within the timeframe set out 
in the tribe's authorizing resolution. If a timeframe is not 
specified, withdrawal becomes effective one year from the 
submission of the request or on the date the funding agreement 
expires, whichever occurs first. An alternative date can be 
agreed to by the parties, including the Secretary.
    When an Indian tribe withdraws from an inter-tribal 
consortium or tribal organization and wishes to enter into a 
Title I contract or Title V agreement on its own, it is 
entitled to receive its share of funds supporting the program, 
function, service, or activity, (or portion thereof) that it 
will carry out under its new status. The funds must be removed 
from the funding agreement of the participating organization or 
inter-tribal consortium and included in the withdrawing tribe's 
agreement or contract. If the withdrawing tribe is to receive 
services directly from the Secretary, the tribe's share of 
funds must be removed from the funding agreement of the 
participating organization or inter-tribal consortium and 
retained by the Secretary to provide services. Finally, an 
Indian tribe that chooses to terminate itsparticipation in the 
self-governance program may, at its option, carry out programs, 
functions, services, or activities, (or portions thereof) in a Title I 
contractor agreement or self-governance funding agreement and retain 
its mature contractor status.
    (h) Nonduplication. This section provides that a tribe 
operating under a self-governance Compact may not contract 
under Title I agreement (a ``638 contract'') for the same 
programs.
            Section 507. Provisions relating to the Secretary
    This section sets out mandatory and non-mandatory 
provisions relating to the Secretary's obligations.
    (a) Mandatory Provisions.
    (1) Health Status Reports. To the extent that the data is 
not otherwise available to the Secretary, Compacts and funding 
agreements must include a provision requiring the Indian tribe 
to report data on health status and service delivery. The 
Secretary is to use this data in her annual reports to 
Congress. The Secretary is required to provide funding to the 
Indian tribe to compile such data. Reporting requirements can 
only impose minimal burdens on the Indian tribe and may only be 
imposed if they are contained in regulations developed under 
negotiated rulemaking.
    (2) Reassumption. Compacts and funding agreements must 
include a provision authorizing the Secretary to reassume a 
program, function, service, or activity, (or portion thereof) 
if the Secretary makes a finding of imminent endangerment of 
the public health caused by the Indian tribe's failure to carry 
out the Compact or funding agreement of gross mismanagement 
that causes a significant reduction in available funding. The 
Secretary is required to provide the Indian tribe with notice 
of a finding. The Indian tribe may take action to correct the 
problem identified in the notice. The Secretary has the burden 
at the hearing of demonstrating by clear and convincing 
evidence the validity of the grounds for reassumption. In cases 
where the Secretary finds imminent substantial and irreparable 
endangerment of the public health caused by the tribe's failure 
to carry out the Compact or funding agreement, the Secretary 
may immediately reassume the program but is required to provide 
the tribe with a hearing on the record within ten days after 
reassumption.
    (b) Final Offer. If the parties cannot agree on the terms 
of a Compact or funding agreement, the Indian tribe may submit 
a final offer to the Secretary. The Secretary has 45 days to 
determine if the offer will be accepted or rejected. The 45 
days can be extended by the Indian tribe. If the Secretary 
takes no action the offer is deemed accepted by the Secretary.
    (c) Rejection of Final Offers. This provision describes the 
only circumstances under which the Secretary may reject an 
Indian tribe's final offer. A rejection requires written notice 
to the Indian tribe within 45 days of receipt with specific 
findings that clearly demonstrate or are supported by 
controlling legal authority that: (1) the amount of funds 
proposed exceeds the funding level that the Indian tribe is 
entitled to; (2) the program, function, service, or activity 
(or portion thereof) that is the subject of the offer is an 
inherent federal function that only can be carried out by the 
Secretary; (3) the applicant is not eligible to participate in 
self-governance; or (4) the Indian tribe cannot carry out the 
program, function, service or activity, (or portion thereof) 
without a significant danger or risk to the public health. The 
Committee believes the fourth provision appropriately balances 
the Secretary's trust responsibility to assure the delivery of 
health care services to Indian beneficiaries, with the equally 
important goal of fostering maximum tribal self-determination 
in the administration of health care programs transferred under 
Title V. The Committee has included the requirement of a 
``specific finding'' is included to avoid rejections which 
merely state conclusory statements that offer no analysis and 
determination of facts supporting the rejection.
    The Secretary must also offer assistance to the Indian 
tribe to overcome the stated objections, and must provide the 
Indian tribe with an opportunity to appeal the rejection and 
have a hearing on the record. In any hearing the Indian tribe 
has the right to engage in full discovery. The Indian tribe 
also has the option to proceed directly to federal district 
court under Section 110 the Indian Self-Determination and 
Education Assistance Act.
    The Secretary may only reject those portions of a ``final 
offer'' that are supported by the findings and must agree to 
all severable portions of a ``final offer'' which do not 
justify a rejection. By entering into a partial Compact or 
funding agreement the Indian tribe does not waive its right to 
appeal the Secretary's decision for the rejected portions of 
the offer.
    (d) Burden of Proof. The Secretary has the burden of 
demonstrating by clear and convincing evidence the validity of 
a rejection of a final offer in any hearing, appeal or civil 
action. A decision relating to an appeal within HHS is 
considered a final agency action if it was made by an 
administrative judge or by an official of HHS whose position is 
at a higher level than the level of the departmental agency in 
which the decision that is the subject of the appeal was made.
    (e) Good Faith. The Secretary is required to negotiate in 
good faith and carry out his discretion under Title V in a 
manner that maximizes the implementation of self-governance.
    (f) Savings. Any savings in the Department's administrative 
costs that result from the transfer of programs, functions, 
services, or activities, (or portions thereof) to Indian tribes 
in self-governance agreements that are not otherwise 
transferred to Indian tribes under Title V must be made 
available to Indian tribes for inclusion in their Compacts or 
funding agreements. We have consistently indicated that self 
governance should achieve reductions in federal bureaucracy and 
create resultant cost savings. This subsection makes clear that 
such savings are for the benefit of the Indian tribes. Savings 
are not to be utilized for other agency purposes, but rather 
are to be provided as additional funds or services to all 
tribes, inter-tribal consortia, and tribal organizations in a 
fair and equitable manner.
    (g) Trust Responsibility. The Secretary is prohibited from 
waiving, modifying or diminishing the trust responsibilities or 
other responsibilities as reflected in treaties, executive 
orders or other laws and court decisions of the United States 
to Indian tribes and individual Indians. The Committee 
reaffirms that the protection of the federal trust 
responsibility to Indian tribes and individuals is a key 
element ofself-governance. The ultimate and legal 
responsibility for the management and preservation of trust resources 
resides with the United States as Trustee. The Committee believes that 
health care is a trust resource consistent with federal court 
decisions. This subsection continues the practice of permitting 
substantial tribal management of its trust resources provided that 
tribal activities do not replace the trustee's specific legal 
responsibilities. Section 506(a)(2) (reassumption) with its concept of 
imminent endangerment of the public health provides guidance in 
defining the Secretary's trust obligation in the health context.
    (h) Decisionmaker. Final agency action is a decision by 
either an official from the Department at any higher 
organizational level than the initial decision maker or an 
administrative law judge. Subparagraph (h)(2) is included to 
assure that the persons deciding an administrative appeal are 
not the same individuals who made the initial decision to 
reject a tribe's ``final offer.''
            Section 508. Transfer of funds
    (a) In General. The Secretary is required to transfer all 
funds provided for in a funding agreement, pursuant to Section 
508(c) below. Funds are also required to be provided for 
periods covered by continuing resolutions adopted by Congress, 
to the extent permitted by such resolutions. When a funding 
agreement requires that funds be transferred at the beginning 
of the fiscal year, the transfer are to be made within 10 days 
after the Office of Management and Budget apportions the funds, 
unless the funding agreement states otherwise.
    (b) Multi-Year Funding. The Secretary is authorized to 
negotiate multi-year funding agreements.
    (c) Amount of Funding. The Secretary is required to provide 
an Indian tribe the same funding for a program, function, 
service, or activity, (or portion thereof) under self-
governance that the tribe would have received under Title I. 
This includes all Secretarial resources that support the 
transferred program, and all contract support costs (including 
indirect costs) that are not available from the Secretary but 
are reasonably necessary to operate the program. The bill 
requires that the transfer of funds occur along with the 
transfer of the program. Thus the bill states that ``the 
Secretary shall provide'' the funds specified, and the 
Secretary is not authorized to phase-in funds in any manner 
that is not voluntarily agreed to by self-governance tribe.
    (d) Prohibition. The Secretary is specifically prohibited 
from withholding, refusing to transfer or reducing any portion 
of an Indian tribe's full share of funds during a Compact or 
funding agreement year, or for a period of years. The Committee 
is aware that for the first 21 years of administration of the 
Indian Self-Determination and Education Assistance Act, the 
Department had never taken the position that it has the 
discretion to delay funding for any program transferred under 
the Act absent tribal consent. However, a 1996 IHS circular 
purported to do just that. Since this circular was issued, 
several area offices have refused to turn over substantial 
program funds to tribal operation. In one instance both an area 
office and headquarters refused to transfer portions of 
programs for several years, and with respect to several 
headquarters functions the IHS refused to transfer the 
functions altogether. A recent Oregon federal district court 
decision declared IHS's actions in these instances illegal and 
the Committee agrees.
    Additionally, funds that an Indian tribe is entitled to 
receive may not be reduced to make funds available to the 
Secretary for monitoring or administration; may not be used to 
pay for federal functions (such as pay costs or retirement 
benefits), and may not be used to pay costs associated with 
federal personnel displaced by self-governance or Title I 
contracting.
    In subsequent years, funds may only be reduced in very 
limited circumstances: if Congress reduces the amount available 
from the prior year's appropriation; if there is a directive in 
the statement of managers which accompanies an appropriation; 
if the Indian tribe agrees; if there is a change in the amount 
of pass-through funds; or if the project contained in the 
funding agreement has been completed.
    (e) Other Resources. If an Indian tribe elects to carry out 
a Compact or funding agreement using federal personnel, 
supplies, supply sources or other resources that the Secretary 
has available under procurement contracts, the Secretary is 
required to acquire and transfer the personnel, supplies or 
resources to the Indian tribe.
    (f) Reimbursement to Indian Health Service. The IHS is 
authorized on a reimbursable basis to provide goods and 
services to tribes. Reimbursements are to be credited to the 
same or subsequent appropriation account which provided the 
initial funding. The Secretary is authorized to receive and 
retain the reimbursed amounts until expended without remitting 
them to the Treasury.
    (g) Prompt Payment Act. This section makes the Prompt 
Payment Act (31 U.S.C. Chapter 39) applicable to the transfer 
of all funds due to a tribe under a Compact or funding 
agreement. The first annual or semi-annual transfer due under a 
funding agreement must be made within 10 calendar days of the 
date the Office of Management and Budget apportions the 
appropriations for that fiscal year. Under this section, the 
Secretary is obligated to pay to a self-governance tribe 
interest, as calculated under the Prompt Payment Act, for any 
late payment under a funding agreement.
    (h) Interest or Other Income on Transfers. An Indian tribe 
may retain interest earned or other income on funds transferred 
under a Compact or funding agreement. Interest earned must not 
reduce the amount of funds the tribe is entitled to receive 
during the year the interest was earned or in subsequent years. 
An Indian tribe may invest funds received in a funding 
agreement as it wishes, provided it follows the ``prudent 
investment standard.''
    (i) Carryover of Funds. All funds paid to an Indian tribe 
under a Compact or funding agreement are ``no year'' funds and 
may be spent in the year they are received or in any future 
fiscal year. Carryover funds are not to reduce the amount of 
funds that the tribe may receive in subsequent years.
    (j) Program Income. All program income (including Medicare/
Medicaid) earned by an Indian tribe is supplemental to the 
funding that is included in its funding agreement. The 
Secretary may notreduce the amount of funds that the Indian 
tribe may receive under its funding agreement for future fiscal years. 
The Indian tribe may retain such income and spend it either in the 
current or future years.
    (k) Limitation of Costs. An Indian tribe is not required to 
continue performance of a program, function, service, or 
activity (or portion thereof) included in a funding agreement 
if doing so requires more funds than were provided under the 
funding agreement. If an Indian tribe believes that the amount 
of funds transferred is not enough to carry out a program, 
function, service, or activity (or portion thereof) for the 
full year, the Indian tribe may so notify the Secretary. If the 
Secretary does not supply additional funds the tribe may 
suspend performance of the program, function, service, or 
activity (or portion thereof) until additional funds are 
provided.
            Section 509. Construction projects
    (a) In General. Indian tribes are authorized to conduct 
construction projects authorized under this section. The tribes 
are to assume full responsibility for the projects, including 
responsibility for enforcement and compliance with all relevant 
federal laws, including the National Historic Preservation Act 
of 1966 and the National Environmental Policy Act of 1969.
    The Committee intends to allow tribes to include the 
maximum available project responsibilities, including 
environmental compliance responsibilities and associated 
funding in their construction project agreements. However, the 
Committee recognizes that due to individual circumstances, this 
may not always be possible. The Committee intends that tribes 
may ``buy back'' project related services in their construction 
project agreement, including design and construction 
engineering and environmental compliance services from the IHS 
in accordance with Section 508(f), subject to the availability 
of the IHS' capacity to conduct the work.
    (b) Negotiations. Negotiation of construction projects are 
negotiated pursuant to Section 105(m) of the Indian Self-
Determination and Education Assistance Act and construction 
project agreements included in the funding agreement as an 
addendum.
    (c) Codes and Standards. Tribes and the IHS will agree to 
standards and codes for the construction project. The agreement 
will be in conformity with nationally accepted standards for 
comparable projects.
    (d) Responsibility for Completion. Payments for 
construction projects will be on an annual or semi-annual 
basis, at the option of the tribe. Flexibility in payment 
schedules will be maintained by the IHS through contingency 
funds to take account of exigent circumstances such as weather 
and supply.
    (e) Funding. The reporting requirements in this section are 
not to be read as requiring any more than the tribe sharing 
with the Secretary such information as is otherwise required to 
be compiled under the normal and customary course of a 
construction project under the standards prescribed in Section 
509(c). Further, this section does not provide for nor 
contemplate any additional administrative or financial 
reporting or record-keeping requirements on a tribe beyond the 
standards otherwise applicable under this Title.
    (f) Approval. This section provides the Secretary at least 
one opportunity to approve project planning and design 
documents prepared by an Indian tribe. The tribe shall also 
provide the Secretary with project progress and financial 
reports as specified. The Secretary may conduct on-site project 
oversight visits as specified.
    (g) Wages. This section sets forth the standards for wages 
paid in connection with the projects funded under this section.
    (h) Application of Other Laws. This section clarifies the 
application of certain other federal laws and regulations to 
Indian tribes under Title V.
            Section 510. Federal procurement laws and program 
                    regulations.
    Unless otherwise agreed to by the parties, Compacts and 
funding agreements are not subject to federal contracting or 
cooperative agreement laws and regulations (including executive 
orders) unless those laws expressly apply to Indian tribes. 
Compacts and funding agreements are also not subject to program 
regulations that apply to the Secretary's operations.
            Section 511. Civil actions
    The Committee intends that Section 110 the Indian Self-
Determination and Education Assistance Act, which provides 
tribes access to Federal District Court to challenge a decision 
by the Secretary, shall apply to compacts and funding 
agreements in this Title.
            Section 512. Facilitation
    (a) Secretarial Interpretation. This section requires the 
Secretary to interpret all executive orders, regulations and 
federal laws in a manner that will facilitate the inclusion of 
programs, functions, services, or activities (or portions 
thereof) and funds associated therewith under Title V, 
implementation of Title V Compacts and funding agreements, and 
the achievement of tribal health goals and objectives where 
they are not inconsistent with federal law. This section 
reinforces the Secretary's obligation not merely to provide 
health care services to Native American tribes, but to 
facilitate the efforts of tribes to manage those programs for 
the maximum benefit of their communities.
    (b) Regulation Waiver. An Indian tribe may seek a waiver of 
any applicable federal regulation issued under the Indian Self-
Determination and Education Assistance Act, as amended, by 
submitting a written waiver request to the Secretary. The 
Secretary has 90 days to respond and a failure to act within 
that period is deemed an approval of the request by operation 
of law. Action on a waiver request is final for the Department. 
Denials may only be made on a specific finding that the waiver 
is prohibited by federal law. No action within the 90 day 
period by the Secretary is deemed an approval.Although the 
waiver procedures do not apply to other departmental regulations, this 
section makes clear that tribes are not subject to departmental program 
regulations that govern how the Department administers a particular 
program. Rather, tribes are expected to carry out transferred health 
care programs pursuant to tribal rules and regulations. The only 
exception is where a particular program requirement is set forth in 
statute, in which case a tribe must comply with the statutory 
limitation or mandate.
    (c) Access to Federal Property. This subsection addresses 
tribal use of federal buildings, hospitals and other 
facilities, as well as the transfer to tribes of title to 
excess personal or real property. At the request of an Indian 
tribe the Secretary is required to permit the Indian tribe to 
use government-owned real or personal property under the 
Secretary's jurisdiction under such terms as the parties may 
agree to.
    The Secretary is required to donate title to personal or 
real property that is excess to the needs of any agency or the 
General Services Administration as long as the Secretary has 
determined that the property is appropriate for any purpose for 
which a compact is authorized, irrespective of whether a tribe 
is in fact administering a particular program that matches that 
purpose. For instance, if a tribe is not administering a mental 
health program under its IHS compact or funding agreement, the 
Secretary may nonetheless acquire excess or surplus property 
and donate such property to the tribe so long as the Secretary 
determines that the tribe will be using the property to 
administer mental health services.
    Title to property furnished by the government or purchased 
with funds received under a Compact or funding agreement vests 
in the Indian tribe if it so chooses. Such property also 
remains eligible for replacement, maintenance or improvement on 
the same terms as if the United States had title to it. Any 
property that is worth $5,000 or more at the time of a 
retrocession, withdrawal or reassumption may revert back to the 
United States at the option of the Secretary.
    (d) Matching or Cost-Participation Requirement. Funds 
transferred under Compacts and funding agreements are to be 
considered non-federal funds for purposes of meeting matching 
or cost participation requirements under federal or non-federal 
programs.
    (e) State Facilitation. This section encourages and 
authorizes States to enter agreements with tribes supplementing 
and facilitating Title V and other federal laws that benefit 
Indians and Indian tribes, e.g., Welfare Reform. It is designed 
to provide federal authority so as to remove potential equal 
protection objections where states enter into special 
arrangements with tribes.
    The Committee wants to foster enlightened and productive 
partnerships between State and local governments, on the one 
hand, and Indian tribes on the other; and, the Committee wants 
to be sure that States are authorized by the federal government 
to undertake such initiatives, as part of the federal 
government's constitutional authority to deal with Indian 
tribes as political entities, irrespective of any limitations 
which have from time to time been argued might otherwise exist 
with respect to State action under either State constitutional 
provisions or other provisions of the Constitution. Many State 
and tribal governments have undertaken positive initiatives 
both in health care issues and in natural resource management, 
and it is the Committee's strong desire to fully support, 
authorize and encourage such cooperative efforts.
    (f) Rules of Construction. Provisions in this Title and in 
Compacts and funding agreements shall be liberally construed 
and ambiguities decided for the benefit of the Indian tribe 
participating in the program.
            Section 513. Budget request
    (a) In General. The President is required to annually 
identify in his/her budget all funds needed to fully fund all 
Title V Compacts and funding agreements. These funds are to be 
apportioned to the IHS Office of Tribal Self-Governance. The 
IHS may not thereafter reduce the funds a tribe is otherwise 
entitled to receive whether or not such funds have been 
apportioned to the Office of Tribal Self-Governance.
    The Committee has been made aware that the current system 
for payment and approval of funding and amendments for annual 
funding agreements for self-governance demonstration tribes is 
inefficient and time consuming. In addition, by leaving 
authority and responsibility for distributions to area offices, 
there have been reported instances of excessive and unwarranted 
assertion of authority by area offices over self governance 
tribes. This includes area offices retaining shares of funds 
not authorized to be retained by the tribe's annual funding 
agreement. The Committee concludes that by requiring a report 
on self-governance expenditures, and by moving all self-
governance funding onto a single line, the Congress will be 
able to achieve the following ends: more accurately gauge the 
amount of funding flowing directly to tribes through 
participation in self governance; generate savings through 
decreasing the bureaucratic burden on the payment and approval 
process in the IHS; expedite the transferal of funding to 
tribal operating units; and aid in the implementation of true 
government to government relations and tribal self 
determination.
    (b) Present Funding; Shortfalls. The budget must identify 
the present level of need and any shortfalls in funding for 
every Indian tribe in the United States that receives services 
directly from the Secretary, through a Title I contract or in a 
Title V Compact and funding agreement.
            Section 514. Reports
    (a) Annual Report. The Secretary is required to submit to 
Congress on January 1 of every year a written report on the 
Self-Governance program. The report is to include the level of 
need presently funded or unfunded for every Indian tribe in the 
United States that receives services directly from the 
Secretary, through a Title I contract or in a Title V Compact 
and funding agreement.
    (b) Contents. The Secretary's report must identify: the 
costs and benefits of self-governance; all funds related to the 
Secretary's provision of services and benefits to self-
governance tribes and their members; all funds transferred to 
self-governance tribes and the corresponding reduction in the 
federalbureaucracy; the funding formula for individual tribal 
shares; and the amount expended by the Secretary during the preceding 
fiscal year to carry out inherent federal functions.
    The Secretary's report must, at the request of any Indian 
tribe, include comments from the tribe. The report must be 
distributed to all Indian tribes for comment no less than 30 
days prior to its submission to Congress. Finally, the 
Secretary may not impose reporting requirements on Indian 
tribes unless specified in Title V.
    (c) Report on Fund Distribution Method. This section 
requires the Secretary to consult with Indian tribes and 
report, within 180 days after Title V is enacted, on funding 
formulae used to determine tribal shares of funds controlled by 
IHS. The formulae are to become a part of the annual report to 
Congress discussed above in Section 514(a). This provision is 
not intended to relieve HHS from its obligation under Title V 
to make all funds controlled by the central office, national, 
headquarters or regional offices available to Indian tribes. 
This provision is also not intended to require reopening 
funding formulae that are already being used by HHS to 
distribute funds to Indian tribes. Any new formulae or revision 
of existing formulae should be determined only after 
significant regional and national tribal consultation.
            Section 515. Disclaimers
    (a) No Funding Reduction. This provision states that 
nothing in Title V shall be interpreted to limit or reduce the 
funding for any program, project or activity that any other 
Indian tribe may receive under Title I or other applicable 
federal laws. A tribe that alleges that a Compact or funding 
agreement violates this section may rely on Section 110 of the 
Indian Self-Determination and Education Assistance Act to seek 
judicial review of the allegation.
    (b) Federal Trust and Treaty Responsibilities. This section 
clarifies that the trust responsibility of the United States to 
Indian tribes and individual Indians which exists under 
treaties, Executive Orders, laws and court decisions shall not 
be reduced by any provision of Title V.
    (c) Tribal Employment. This provision excludes Indian 
tribes carrying out responsibilities under a Compact or funding 
agreement from falling under the definition of ``employer'' as 
that term is used in the National Labor Regulations Act.
    (d) Obligations of the United States. The IHS is prohibited 
from billing, or requiring Indian tribes from billing, 
individual Indians who have the economic means to pay for 
services. For many years the Interior and Related Agencies 
Appropriations Bills included language that prohibited the IHS, 
without explicit direction from Congress, from billing or 
charging Indians who have the economic means to pay. In 1997 
the language was removed from the appropriation laws and it has 
not been included since. This section reflects the Committee's 
intent that the IHS is prohibited from billing Indians for 
services, and is further prohibited from requiring any Indian 
tribe to do so.
            Section 516. Application of other sections of the act
    (a) Mandatory Application. This section incorporates a 
number of sections from Title I of the Indian Self-
Determination and Education Assistance Act and makes them 
applicable to Title V. These sections include: 6 (setting out 
penalties that apply if an individual embezzles or otherwise 
misappropriates funds under Title V); 7 (Davis-Bacon wage and 
labor standards and Indian preference requirements); 102(c)-(d) 
(relating to Federal Tort Claims Act coverage); 104 (relating 
to the right to use federal personnel to carry out 
responsibilities in a Compact or funding agreement); 105(k) 
(access to federal supplies); 111 (clarifying that Title V 
shall have no impact on existing sovereign immunity and the 
United States' trust responsibility); and section 314 from 
Public Law 101-512, as amended (relating to Federal Tort Claims 
Act coverage).
    (b) Discretionary Application. At the request of an Indian 
tribe, other provisions of Title I of the Indian Self-
Determination and Education Assistance Act which do not 
conflict with provisions in Title V may be incorporated into a 
Compact or funding agreement. If incorporation is requested 
during negotiations it will be considered effective 
immediately.
            Section 517. Regulations
    This section gives the Secretary limited authority to 
promulgate regulations implementing Title V.
    (a) In General. The Secretary is required to initiate 
procedures to negotiate and promulgate regulations necessary to 
carry out Title V within 90 days of enactment of Title V. The 
procedures must be developed under the Federal Advisory 
Committee Act. The Secretary is required to publish proposed 
regulations no later than one year after the date of enactment 
of Title V. The authority to promulgate final regulations under 
Title V expires 21 months after enactment. The Committee is 
aware of the success of the Title I negotiated rulemaking and 
believes that one reason for its success is a similar 
limitation of rulemaking authority contained in section 1070(a) 
of the Indian Self-Determination Act, which this section is 
modeled after.
    (b) Committee. This provision requires that a negotiated 
rulemaking committee made up of federal and tribal government 
members be formed in accordance with the Negotiated Rulemaking 
Act. A majority of the tribal committee members must be 
representatives of and must have been nominated by Indian 
tribes with Title V Compacts and funding agreements. The 
committee will confer with and allow representatives of Indian 
tribes, inter-tribal consortiums, tribal organizations and 
individual tribal members to actively participate in the 
rulemaking process.
    (c) Adaptation of Procedures. The negotiated rulemaking 
procedures may be modified by the Secretary to ensure that the 
unique context of self-governance and the government-to-
government relationship between the United States and Indian 
tribes is accommodated.
    (d) Effect. The effect of Title V shall not be limited if 
regulations are not published.
    (e) Effect of Circulars, Policies, Manuals, Guidances and 
Rules. Unless an Indian tribe agrees otherwise in a Compact or 
funding agreement, no agency circulars, policies, manuals, 
guidances or rules adopted by the IHS apply to the tribe, 
except as specified.
            Section 518. Appeals
    In any appeal (including civil actions) involving a 
decision by the Secretary under Title V, the Secretary carries 
the burden of proof. To satisfy this burden the Secretary must 
establish by clear and convincing evidence the validity of the 
grounds for the decision made and that the decision is fully 
consistent with provisions and policies of Title V.
            Section 519. Authorization of appropriations
    This section authorizes Congress to appropriate such funds 
as are necessary to carry out Title V.

   TITLE VI--TRIBAL SELF-GOVERNANCE, DEPARTMENT OF HEALTH AND HUMAN 
                                SERVICES

    This new Title to sets out the requirements of a 
feasibility study in the Department of Health and Human 
Services.
            Section 601. Demonstration project feasibility
    This section requires the Secretary to conduct a 
feasibility study to determine whether non-IHS programs in HHS 
are appropriate for a tribal self-governance demonstration 
project. The Secretary shall consider the probable effects on 
specific programs and beneficiaries; statutory or other 
impediments; costs and/or savings; assurance of quality in such 
a demonstration project; and other issues. The Secretary's 
report is required no later than 18 months from the enactment 
of this Act.
            Section 602. Consultation
    This section requires the Secretary to consult with Indian 
tribes to develop a consultation protocol. The government-to-
government relationship between the tribes and the federal 
government will be an important part of the protocol. 
Consultation will be conducted jointly by the Secretary and the 
tribes. States, counties, municipalities, program beneficiaries 
and Indian tribes will be part of the consultation process.
            Section 603. Definitions
    This section provides definitions used under this new Title 
which are to be the same as those under Title V, except the 
definition of ``agency'' which means a unit of HHS other than 
IHS.
            Section 604. Authorization of appropriations
    This section authorizes such sums as may be necessary to 
carry out the feasibility study.

Section 5. Amendments clarifying civil proceedings

    (a) Burden of Proof to District Court Actions. This 
provision amends Section 102(e)(1) of the Indian Self-
Determination and Education Assistance Act to clarify that the 
Secretary has the burden of proof in any civil action pursuant 
to Section 110(a).
    Earlier versions of this legislation stated a confirmation 
that the district courts were able to conduct a de novo review 
of claims arising under section 110 of the Indian Self-
Determination and Education Assistance Act. Section 110 
provides tribes and tribal contractors with the right to pursue 
civil claims over tribal contracts, compacts, and funding 
agreements in the federal district courts. Congress provided 
tribes with this relief to assure that tribes had a strong, 
effective, and immediate means to obtain agency compliance with 
the Act's requirements. The federal courts, however, have given 
opposing interpretations over whether this section vests courts 
with de novo review authority. Legislative history arising 
under the 1994 Indian Self-Determination Act Amendments 
indicates that this section gave district courts original 
jurisdiction over any civil action or claim against the 
appropriate Secretary, without prior exhaustion of an 
administrative remedy. As noted at the time, this direct access 
to the district court was required to assure a strong, 
effective, and immediate means to obtain agency compliance with 
the Act's contracting requirements. Since the amendment, at 
least two district court have declined to afford tribal 
contractors the intended de novo review and full discovery on 
their claims, effectively requiring tribal plaintiffs to go 
through an administrative appeal first to obtain discovery from 
the agency. This result is contrary to the clear purpose of the 
1994 amendments, and defeats the broad self-determination and 
contracting policies underlying the Act. To cure confirmed 
agency inclinations to block, delay, or minimize tribal 
contracting and funding, it is essential for the district 
courts to actively adjudicate de novo contracting and funding 
issues based on full discovery regarding agency budget and 
accounting practices, program and staffing decisions, and 
assertions of non-contractibility. Because the Act requires the 
agencies to divest themselves of programs, staff, and funding 
at tribal request, the courts should not give Administrative 
Procedure Act-type deference to agency decisionmaking.
    The Committee's elimination of the de novo clarifying 
provision from this bill is not intended in any way to send a 
signal to the courts or the Administration that de novo review 
was not intended in the first place. Rather, elimination of 
this provision is simply intended to let litigation between the 
tribes and the Administration continue on, and for the courts 
to ultimately decide this matter against the background of the 
clear legislative history of the 1994 amendments.
    (b) Effective Date. The provisions of subsection (a) shall 
apply to any proceeding commenced after October 25, 1994.

Section 6. Speedy acquisition of goods and services

    This section requires the Secretary to enter into 
agreements for acquisition of goods and services for tribes, 
including pharmaceuticals at the best price and in as fast a 
manner as is possible, similar to those obtained by agreement 
by the Veterans Administration.

Section 7. Patent records

    Patent records may be deemed to be federal records for 
storage purposes by the Federal Records Center.

Section 8. Repeal

    This section repeals Title III of the Indian Self-
Determination and Education Assistance Act effective on the 
date of enactment.

Section 9. Savings provisions

    Funds appropriated under Title III shall be available for 
use under Title V.

Section 10. Effective date

    This section provides that the provisions of H.R. 1167 
shall take effect on the date of the enactment, except as 
otherwise provided.

            Committee Oversight Findings and Recommendations

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Resources' oversight findings and recommendations 
are reflected in the body of this report.

                   Constitutional Authority Statement

    Article I, section 8 of the Constitution of the United 
States grants Congress the authority to enact H.R. 1167.

                    Compliance With House Rule XIII

    1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(3)(B) 
of that rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974.
    2. Congressional Budget Act. As required by clause 3(c)(2) 
of rule XIII of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, this 
bill does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.
    3. Government Reform Oversight Findings. Under clause 
3(c)(4) of rule XIII of the Rules of the House of 
Representatives, the Committee has received no report of 
oversight findings and recommendations from the Committee on 
Government Reform on this bill.
    4. Congressional Budget Office Cost Estimate. Under clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for this bill from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 27, 1999.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1167, the Tribal 
Self-Governance Amendments of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dorothy 
Rosenbaum.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 1167--Tribal Self-Governance Amendments of 1999

    CBO estimates that H.R. 1167 would increase authorizations 
of appropriations by less than $500,000 in each of fiscal years 
2000 through 2004. Because enacting the bill would not affect 
direct spending or receipts, pay-as-you-go procedures would not 
apply. The legislation contains no intergovernmental or 
private-sector mandates as defined in the Unfunded Mandates 
Reform Act and would impose no costs on state, local, or tribal 
governments.
    H.R. 1167 would amend the Indian Self-Determination and 
Education Assistance Act to establish a permanent tribal self-
governance program with the Indian Health Service (IHS). Under 
existing demonstration authority, the IHS and tribes enter into 
funding agreements whereby a tribe assumes administrative and 
programmatic duties that were previously performed by the 
federal government. Because the current demonstration authority 
does not end until 2006, and because the provisions of the new 
permanent program would not be significantly different from 
current law, CBO estimates that establishing a permanent 
program would have no federal budgetary impact over fiscal 
years 1999 to 2004. Under the existing demonstration program, 
IHS may select 30 new tribes each year to participate. Under 
the bill, the number would be raised to 50. Because in recent 
years fewer than 10 new tribes each year have become eligible 
to participate, CBO assumes that this change in law would have 
no effect.
    H.R. 1167 would authorize appropriations for fiscal years 
2000 and 2001 for the IHS to conduct a study and report to 
Congress on the feasibility of a demonstration project that 
would expand self-governance compacts to include programs 
operated by agencies of the Department of Health and Human 
Services other than the IHS. CBO estimates that this study 
would cost less than $250,000.
    H.R. 1167 would allow Indian tribes to store their patient 
records at Federal Records Centers. CBO assumes that very few 
tribes would take advantage of this option and that increased 
costs to the Federal Records Centers would be less than 
$500,000 in each of fiscal years 2000 through 2004.
    The CBO staff contact for this estimate is Dorothy 
Rosenbaum. This estimate was approved by Paul N. Van de Water, 
Assistant Director for Budget Analysis.

                    Compliance With Public Law 104-4

    This bill contains no unfunded mandates.

                Preemption of State, Local or Tribal Law

    This bill is not intended to preempt any State, local or 
tribal law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

INDIAN SELF-DETERMINATION AND EDUCATION ASSISTANCE ACT

           *       *       *       *       *       *       *



TITLE I--INDIAN SELF-DETERMINATION ACT

           *       *       *       *       *       *       *


    Sec. 102. (a)(1)  * * *

           *       *       *       *       *       *       *

  (e)(1) With respect to any hearing or appeal conducted 
pursuant to subsection (b)(3) or any civil action conducted 
pursuant to section 110(a), the Secretary shall have the burden 
of proof to establish by clearly demonstrating the validity of 
the grounds for declining the contract proposal (or portion 
thereof).

           *       *       *       *       *       *       *

    Sec. 105. (a)(1)  * * *

           *       *       *       *       *       *       *

  (k) For purposes of section 201(a) of the Federal Property 
and Administrative Services Act of 1949 (40 U.S.C. 481(a)) 
(relating to Federal sources of supply, including lodging 
providers, airlines and other transportation providers), a 
tribal organization [carrying out a contract, grant, or 
cooperative agreement under this Act shall be deemed an 
executive agency when carrying out such contract, grant, or 
agreement and the employees of the tribal organization shall be 
eligible] or Indian tribe shall be deemed an executive agency 
and a part of the Indian Health Service, and the employees of 
the tribal organization or the Indian tribe, as the case may 
be, shall be eligible to have access to such sources of supply 
on the same basis as employees of an executive agency have such 
access. At the request of an Indian tribe, the Secretary shall 
enter into an agreement for the acquisition, on behalf of the 
Indian tribe, of any goods, services, or supplies available to 
the Secretary from the General Services Administration or other 
Federal agencies that are not directly available to the Indian 
tribe under this section or any other Federal law, including 
acquisitions from prime vendors. All such acquisitions shall be 
undertaken through the most efficient and speedy means 
practicable, including electronic ordering arrangements.

           *       *       *       *       *       *       *

  (o) At the option of a tribe or tribal organization, patient 
records may be deemed to be Federal records under the Federal 
Records Act of 1950 for the limited purposes of making such 
records eligible for storage by Federal Records Centers to the 
same extent and in the same manner as other Department of 
Health and Human Services patient records. Patient records that 
are deemed to be Federal records under the Federal Records Act 
of 1950 pursuant to this subsection shall not be considered 
Federal records for the purposes of chapter 5 of title 5, 
United States Code.

           *       *       *       *       *       *       *


        [TITLE III--TRIBAL SELF-GOVERNANCE DEMONSTRATION PROJECT

  [Sec. 301. The Secretary of the Interior and the Secretary of 
Health and Human Services (hereafter in this title referred to 
as the ``Secretaries'') each shall, for a period not to exceed 
18 years following enactment of this title, conduct a research 
and demonstration project to be known as the Tribal Self-
Governance Project according to the provisions of this title.
  [Sec. 302. (a) For each fiscal year, the Secretaries shall 
select thirty tribes to participate in the demonstration 
project, as follows:
          [(1) a tribe that successfully completes a Self-
        Governance Planning Grant, authorized by Conference 
        Report 100-498 to accompany H.J. Res. 395, One 
        Hundredth Congress, first session shall be selected to 
        participate in the demonstration project; and
          [(2) the Secretaries shall select, in such a manner 
        as to achieve geographic representation, the remaining 
        tribal participants from the pool of qualified 
        applicants. In order to be in the pool of qualified 
        applicants--
                  [(A) the governing body of the tribe shall 
                request participation in the demonstration 
                project;
                  [(B) such tribe shall have operated two or 
                more mature contracts; and
                  [(C) such tribe shall have demonstrated, for 
                the previous three fiscal years, financial 
                stability and financial management capability 
                as evidenced by such tribe having no 
                significant and material audit exceptions in 
                the required annual audit of such tribe's self-
                determination contracts.
  [Sec. 303. (a) The Secretaries is directed to negotiate, and 
to enter into, an annual written funding agreement with the 
governing body of a participating tribal government that 
successfully completes its Self-Governance Planning Grant. Such 
annual written funding agreement--
          [(1) shall authorize the tribe to plan, conduct, 
        consolidate, and administer programs, services and 
        functions of the Department of the Interior and the 
        Indian Health Service of the Department of Health and 
        Human Services that are otherwise available to Indian 
        tribes or Indians, including but not limited to, the 
        Act of April 16, 1934 (48 Stat. 596), as amended, and 
        the Act of November 2, 1921 (42 Stat. 208);
          [(2) subject to the terms of the written agreement 
        authorized by this title, shall authorize the tribe to 
        redesign programs, activities, functions or services 
        and to reallocate funds for such programs, activities, 
        functions or services;
          [(3) shall not include funds provided pursuant to the 
        Tribally Controlled Community College Assistance Act 
        (Public Law 95-471), for elementary and secondary 
        schools under the Indian School Equalization Formula 
        pursuant to title XI of the Education Amendments of 
        1978 (Public Law 95-561, as amended), or for either the 
        Flathead Agency Irrigation Division or the Flathead 
        Agency Power Division: Provided, That nothing in this 
        section shall affect the contractability of such 
        divisions under section 102 of this Act;
          [(4) shall specify the services to be provided, the 
        functions to be performed, and the responsibilities of 
        the tribe and the Secretaries pursuant to this 
        agreement;
          [(5) shall specify the authority of the tribe and the 
        Secretaries, and the procedures to be used, to 
        reallocate funds or modify budget allocations within 
        any project year;
          [(6) shall, except as provided in paragraphs (1) and 
        (2), provide for payment by the Secretaries to the 
        tribe of funds from one or more programs, services, 
        functions, or activities in an amount equal to that 
        which the tribe would have been eligible to receive 
        under contracts and grants under this Act, including 
        direct program costs and indirect costs, and for any 
        funds which are specifically related to the provision 
        by the Secretaries of services and benefits to the 
        tribe and its members: Provided, however, That funds 
        for trust services to individual Indians are available 
        under this written agreement only to the extent that 
        the same services which would have been provided by the 
        Secretaries are provided to individual Indians by the 
        tribe;
          [(7) shall not allow the Secretaries to waive, modify 
        or diminish in any way the trust responsibility of the 
        United States with respect to Indian tribes and 
        individual Indians which exists under treaties, 
        Executive orders, and Acts of Congress;
          [(8) shall allow for retrocession of programs or 
        portions thereof pursuant to section 105(e) of this 
        Act; and
          [(9) shall be submitted by the Secretaries ninety 
        days in advance of the proposed effective date of the 
        agreement to each tribe which is served by the agency 
        which is serving the tribe which is a party to the 
        funding agreement and to the Congress for review by the 
        Committee on Indian Affairs of the Senate and the 
        Committee on Natural Resources of the House of 
        Representatives.
  [(b) For the year for which, and to the extent to which, 
funding is provided to a tribe pursuant to this title, such 
tribe--
          [(1) shall not be entitled to contract with the 
        Secretaries for such funds under section 102, except 
        that such tribe shall be eligible for new programs on 
        the same basis as other tribes; and
          [(2) shall be responsible for the administration of 
        programs, services and activities pursuant to 
        agreements under this title.
  [(c) At the request of the governing body of the tribe and 
under the terms of an agreement pursuant to subsection (a), the 
Secretaries shall provide funding to such tribe to implement 
the agreement.
  [(d) For the purpose of section 110 of this Act the term 
``contract'' shall also include agreements authorized by this 
title except that for the term of the authorized agreements 
under this title, the provisions of section 2103 of the Revised 
Statutes of the United States (25 U.S.C. 81), and section 16 of 
the Act of June 18, 1934 (25 U.S.C. 476), shall not apply to 
attorney and other professional contracts by participating 
Indian tribal governments operating under the provisions of 
this title.
  [(e) To the extent feasible, the Secretaries shall interpret 
Federal laws and regulations in a manner that will facilitate 
the agreements authorized by this title.
  [(f) To the extent feasible, the Secretaries shall interpret 
Federal laws and regulations in a manner that will facilitate 
the inclusion of activities, programs, services, and functions 
in the agreements authorized by this title.
  [Sec. 304. The Secretaries shall identify, in the President's 
annual budget request to the Congress, any funds proposed to be 
included in the Tribal Self-Governance Project. The use of 
funds pursuant to this title shall be subject to specific 
directives or limitations as may be included in applicable 
appropriations Acts.
  [Sec. 305. The Secretaries shall submit to the Congress a 
written report on July 1 and January 1 of each of the five 
years following the date of enactment of this title on the 
relative costs and benefits of the Tribal Self-Governance 
Project. Such report shall be based on mutually determined 
baseline measurements jointly developed by the Secretaries and 
participating tribes, and shall separately include the views of 
the tribes.
  [Sec. 306. Nothing in this title shall be construed to limit 
or reduce in any way the services, contracts or funds that any 
other Indian tribe or tribal organization is eligible to 
receive under section 102 or any other applicable Federal law 
and the provisions of section 110 of this Act shall be 
available to any tribe or Indian organization which alleges 
that a funding agreement is in violation of this section.
  [Sec. 307. For the purpose of providing planning and 
negotiation grants to the ten tribes added by section 3 of the 
Tribal Self-Governance Demonstration Project Act to the number 
of tribes set forth by section 302 of this Act (as in effect 
before the date of enactment of this section), there is 
authorized to be appropriated $700,000.
  [Sec. 308. (a) The Secretary of Health and Human Services, in 
consultation with the Secretary of the Interior and Indian 
tribal governments participating in the demonstration project 
under this title, shall conduct a study for the purpose of 
determining the feasibility of extending the demonstration 
project under this title to the activities, programs, 
functions, and services of the Indian Health Service. The 
Secretary shall report the results of such study, together with 
his recommendations, to the Congress within the 12-month period 
following the date of the enactment of the Tribal Self-
Governance Demonstration Project Act.
  [(b) The Secretary of Health and Human Services may establish 
within the Indian Health Service an office of self-governance 
to be responsible for coordinating the activities necessary to 
carry out the study required under subsection (a).
  [Sec. 309. The Secretary of the Interior shall conduct a 
study for the purpose of determining the feasibility of 
including in the demonstration project under this title those 
programs and activities excluded under section 303(a)(3). The 
Secretary of the Interior shall report the results of such 
study, together with his recommendations, to the Congress 
within the 12-month period following the date of the enactment 
of the Tribal Self-Governance Demonstration Project Act.
  [Sec. 310. For the purposes of providing one year planning 
and negotiations grants to the Indian tribes identified by 
section 302, with respect to the programs, activities, 
functions, or services of the Indian Health Service, there are 
authorized to be appropriated such sums as may be necessary to 
carry out such purposes. Upon completion of an authorized 
planning activity or a comparable planning activity by a tribe, 
the Secretary is authorized to negotiate and implement a 
Compact of Self-Governance and Annual Funding Agreement with 
such tribe.]

           *       *       *       *       *       *       *


                    TITLE V--TRIBAL SELF-GOVERNANCE

SEC. 501. ESTABLISHMENT.

  The Secretary of Health and Human Services shall establish 
and carry out a program within the Indian Health Service of the 
Department of Health and Human Services to be known as the 
``Tribal Self-Governance Program'' in accordance with this 
title.

SEC. 502. DEFINITIONS.

  (a) In General.--For purposes of this title--
          (1) the term ``construction project'' means an 
        organized noncontinuous undertaking to complete a 
        specific set of predetermined objectives for the 
        planning, environmental determination, design, 
        construction, repair, improvement, or expansion of 
        buildings or facilities, as described in a construction 
        project agreement. The term ``construction project'' 
        does not mean construction program administration and 
        activities described in paragraphs (1) through (3) of 
        section 4(m), which may otherwise be included in a 
        funding agreement under this title;
          (2) the term ``construction project agreement'' means 
        a negotiated agreement between the Secretary and an 
        Indian tribe which at a minimum--
                  (A) establishes project phase start and 
                completion dates;
                  (B) defines a specific scope of work and 
                standards by which it will be accomplished;
                  (C) identifies the responsibilities of the 
                Indian tribe and the Secretary;
                  (D) addresses environmental considerations;
                  (E) identifies the owner and operations/
                maintenance entity of the proposed work;
                  (F) provides a budget;
                  (G) provides a payment process; and
                  (H) establishes the duration of the agreement 
                based on the time necessary to complete the 
                specified scope of work, which may be 1 or more 
                years;
          (3) the term ``inherent Federal functions'' means 
        those Federal functions which cannot legally be 
        delegated to Indian tribes;
          (4) the term ``inter-tribal consortium'' means a 
        coalition of two or more separate Indian tribes that 
        join together for the purpose of participating in self-
        governance, including, but not limited to, a tribal 
        organization;
          (5) the term ``gross mismanagement'' means a 
        significant, clear, and convincing violation of 
        compact, funding agreement, or regulatory, or statutory 
        requirements applicable to Federal funds transferred to 
        a tribe by a compact or funding agreement that results 
        in a significant reduction of funds available for the 
        programs, services, functions, or activities (or 
        portions thereof) assumed by an Indian tribe;
          (6) the term ``tribal shares'' means an Indian 
        tribe's portion of all funds and resources that support 
        secretarial programs, services, functions, and 
        activities (or portions thereof) that are not required 
        by the Secretary for performance of inherent Federal 
        functions;
          (7) the term ``Secretary'' means the Secretary of 
        Health and Human Services; and
          (8) the term ``self-governance'' means the program 
        established pursuant to section 501.
  (b) Indian Tribe.--Where an Indian tribe has authorized 
another Indian tribe, an inter-tribal consortium, or a tribal 
organization to plan for or carry out programs, services, 
functions, or activities (or portions thereof) on its behalf 
under this title, the authorized Indian tribe, inter-tribal 
consortium, or tribal organization shall have the rights and 
responsibilities of the authorizing Indian tribe (except as 
otherwise provided in the authorizing resolution or in this 
title). In such event, the term ``Indian tribe'' as used in 
this title shall include such other authorized Indian tribe, 
inter-tribal consortium, or tribal organization.

SEC. 503. SELECTION OF PARTICIPATING INDIAN TRIBES.

  (a) Continuing Participation.--Each Indian tribe that is 
participating in the Tribal Self-Governance Demonstration 
Project under title III on the date of enactment of this title 
may elect to participate in self-governance under this title 
under existing authority as reflected in tribal resolutions.
  (b) Additional Participants.--
          (1) In addition to those Indian tribes participating 
        in self-governance under subsection (a), each year an 
        additional 50 Indian tribes that meet the eligibility 
        criteria specified in subsection (c) shall be entitled 
        to participate in self-governance.
          (2)(A) An Indian tribe that has withdrawn from 
        participation in an inter-tribal consortium or tribal 
        organization, in whole or in part, shall be entitled to 
        participate in self-governance provided the Indian 
        tribe meets the eligibility criteria specified in 
        subsection (c).
          (B) If an Indian tribe has withdrawn from 
        participation in an inter-tribal consortium or tribal 
        organization, it shall be entitled to its tribal share 
        of funds supporting those programs, services, 
        functions, and activities (or portions thereof) that it 
        will be carrying out under its compact and funding 
        agreement.
          (C) In no event shall the withdrawal of an Indian 
        tribe from an inter-tribal consortium or tribal 
        organization affect the eligibility of the inter-tribal 
        consortium or tribal organization to participate in 
        self-governance.
  (c) Applicant Pool.--The qualified applicant pool for self-
governance shall consist of each Indian tribe that--
          (1) successfully completes the planning phase 
        described in subsection (d);
          (2) has requested participation in self-governance by 
        resolution or other official action by the governing 
        body (or bodies) of the Indian tribe or tribes to be 
        served; and
          (3) has demonstrated, for the previous 3 fiscal 
        years, financial stability and financial management 
        capability.
Evidence that during such years the Indian tribe had no 
uncorrected significant and material audit exceptions in the 
required annual audit of the Indian tribe's self-determination 
contracts or self-governance funding agreements shall be 
conclusive evidence of the required stability and capability 
for the purposes of this subsection.
  (d) Planning Phase.--Each Indian tribe seeking participation 
in self-governance shall complete a planning phase. The 
planning phase shall be conducted to the satisfaction of the 
Indian tribe and shall include--
          (1) legal and budgetary research; and
          (2) internal tribal government planning and 
        organizational preparation relating to the 
        administration of health care programs.
  (e) Grants.--Subject to the availability of appropriations, 
any Indian tribe meeting the requirements of paragraphs (2) and 
(3) of subsection (c) shall be eligible for grants--
          (1) to plan for participation in self-governance; and
          (2) to negotiate the terms of participation by the 
        Indian tribe or tribal organization in self-governance, 
        as set forth in a compact and a funding agreement.
  (f) Receipt of Grant Not Required.--Receipt of a grant under 
subsection (e) shall not be a requirement of participation in 
self-governance.

SEC. 504. COMPACTS.

  (a) Compact Required.--The Secretary shall negotiate and 
enter into a written compact with each Indian tribe 
participating in self-governance in a manner consistent with 
the Federal Government's trust responsibility, treaty 
obligations, and the government-to-government relationship 
between Indian tribes and the United States.
  (b) Contents.--Each compact required under subsection (a) 
shall set forth the general terms of the government-to-
government relationship between the Indian tribe and the 
Secretary, including such terms as the parties intend shall 
control year after year. Such compacts may only be amended by 
mutual agreement of the parties.
  (c) Existing Compacts.--An Indian tribe participating in the 
Tribal Self-Governance Demonstration Project under title III on 
the date of enactment of this title shall have the option at 
any time thereafter to--
          (1) retain its Tribal Self-Governance Demonstration 
        Project compact (in whole or in part) to the extent the 
        provisions of such compact are not directly contrary to 
        any express provision of this title, or
          (2) negotiate in lieu thereof (in whole or in part) a 
        new compact in conformity with this title.
  (d) Term and Effective Date.--The effective date of a compact 
shall be the date of the approval and execution by the Indian 
tribe or another date agreed upon by the parties, and shall 
remain in effect for so long as permitted by Federal law or 
until terminated by mutual written agreement, retrocession, or 
reassumption.

SEC. 505. FUNDING AGREEMENTS.

  (a) Funding Agreement Required.--The Secretary shall 
negotiate and enter into a written funding agreement with each 
Indian tribe participating in self-governance in a manner 
consistent with the Federal Government's trust responsibility, 
treaty obligations, and the government-to-government 
relationship between Indian tribes and the United States.
  (b) Contents.--Each funding agreement required under 
subsection (a) shall, as determined by the Indian tribe, 
authorize the Indian tribe to plan, conduct, consolidate, 
administer, and receive full tribal share funding, including 
tribal shares of Indian Health Service competitive grants 
(excluding congressionally earmarked competitive grants), for 
all programs, services, functions, and activities (or portions 
thereof), that are carried out for the benefit of Indians 
because of their status as Indians withoutregard to the agency 
or office of the Indian Health Service within which the program, 
service, function, or activity (or portion thereof) is performed. Such 
programs, services, functions, or activities (or portions thereof) 
include all programs, services, functions, activities (or portions 
thereof) where Indian tribes or Indians are primary or significant 
beneficiaries, administered by the Department of Health and Human 
Services through the Indian Health Service and grants (which may be 
added to a funding agreement after award of such grants) and all local, 
field, service unit, area, regional, and central headquarters or 
national office functions administered under the authority of--
          (1) the Act of November 2, 1921 (25 U.S.C. 13);
          (2) the Act of April 16, 1934 (25 U.S.C. 452 et 
        seq.);
          (3) the Act of August 5, 1954 (68 Stat. 674);
          (4) the Indian Health Care Improvement Act (25 U.S.C. 
        1601 et seq.);
          (5) the Indian Alcohol and Substance Abuse Prevention 
        and Treatment Act of 1986 (25 U.S.C. 2401 et seq.);
          (6) any other Act of Congress authorizing agencies of 
        the Department of Health and Human Services to 
        administer, carry out, or provide financial assistance 
        to such programs, functions, or activities (or portions 
        thereof) described in this section; or
          (7) any other Act of Congress authorizing such 
        programs, functions, or activities (or portions 
        thereof) under which appropriations are made to 
        agencies other than agencies within the Department of 
        Health and Human services when the Secretary 
        administers such programs, functions, or activities (or 
        portions thereof).
  (c) Inclusion in Compact or Funding Agreement.--Indian tribes 
or Indians need not be identified in the authorizing statutefor 
a program or element of a program to be eligible for inclusion in a 
compact or funding agreement under this title.
  (d) Funding Agreement Terms.--Each funding agreement shall 
set forth terms that generally identify the programs, services, 
functions, and activities (or portions thereof) to be performed 
or administered, the general budget category assigned, the 
funds to be provided, including those to be provided on a 
recurring basis, the time and method of transfer of the funds, 
the responsibilities of the Secretary, and any other provisions 
to which the Indian tribe and the Secretary agree.
  (e) Subsequent Funding Agreements.--Absent notification from 
an Indian tribe that is withdrawing or retroceding the 
operation of one or more programs, services, functions, or 
activities (or portions thereof) identified in a funding 
agreement, or unless otherwise agreed to by the parties, each 
funding agreement shall remain in full force and effect until a 
subsequent funding agreement is executed, and the terms of the 
subsequent funding agreement shall be retroactive to the end of 
the term of the preceding funding agreement.
  (f) Existing Funding Agreements.--Each Indian tribe 
participating in the Tribal Self-Governance Demonstration 
Project established under title III on the date of enactment of 
this title shall have the option at any time thereafter to--
          (1) retain its Tribal Self-Governance Demonstration 
        Project funding agreement (in whole or in part) to the 
        extent the provisions of such funding agreement are not 
        directly contrary to any express provision of this 
        title; or
          (2) adopt in lieu thereof (in whole or in part) a new 
        funding agreement in conformity with this title.
  (g) Stable Base Funding.--At the option of an Indian tribe, a 
funding agreement may provide for a stable base budget 
specifying the recurring funds (including, for purposes of this 
provision, funds available under section 106(a) of the Act) to 
be transferred to such Indian tribe, for such period as may be 
specified in the funding agreement, subject to annual 
adjustment only to reflect changes in congressional 
appropriations by sub-sub activity excluding earmarks.

SEC. 506. GENERAL PROVISIONS.

  (a) Applicability.--The provisions of this section shall 
apply to compacts and funding agreements negotiated under this 
title and an Indian tribe may, at its option, include 
provisions that reflect such requirements in a compact or 
funding agreement.
  (b) Conflicts of Interest.--Indian tribes participating in 
self-governance under this title shall ensure that internal 
measures are in place to address conflicts of interest in the 
administration of self-governance programs, services, 
functions, or activities (or portions thereof).
  (c) Audits.--
          (1) Single agency audit act.--The provisions of 
        chapter 75 of title 31, United States Code, requiring a 
        single agency audit report shall apply to funding 
        agreements under this title.
          (2) Cost principles.--An Indian tribe shall apply 
        cost principles under the applicable Office of 
        Management and Budget Circular, except as modified by 
        section 106 or other provisions of law, or by any 
        exemptions to applicable Office of Management and 
        Budget Circulars subsequently granted by Office of 
        Management and Budget. No other audit or accounting 
        standards shall be required by the Secretary. Any claim 
        by the Federal Government against the Indian tribe 
        relating to funds received under a funding agreement 
        based on any audit under this subsection shall be 
        subject to the provisions of section 106(f).
  (d) Records.--
          (1) In general.--Unless an Indian tribe specifies 
        otherwise in the compact or funding agreement, records 
        of the Indian tribe shall not be considered Federal 
        records for purposes of chapter 5 of title 5, United 
        States Code.
          (2) Recordkeeping system.--The Indian tribe shall 
        maintain a recordkeeping system, and, after 30 days 
        advance notice, provide the Secretary with reasonable 
        access to such records to enable the Department of 
        Health and Human Services to meet its minimum legal 
        recordkeeping system requirements under sections 3101 
        through 3106 of title 44, United States Code.
  (e) Redesign and Consolidation.--An Indian tribe may redesign 
or consolidate programs, services, functions, and activities 
(or portions thereof) included in a funding agreement under 
section 505 and reallocate or redirect funds for such programs, 
services, functions, and activities (or portions thereof) in 
any manner which the Indian tribe deems to be in the best 
interest of the health and welfare of the Indian community 
being served, only if the redesign or consolidation does not 
have the effect of denying eligibility for services to 
population groups otherwise eligible to be served under Federal 
law.
  (f) Retrocession.--An Indian tribe may retrocede, fully or 
partially, to the Secretary programs, services, functions, or 
activities (or portions thereof) included in the compact or 
funding agreement. Unless the Indian tribe rescinds the request 
for retrocession, such retrocession will become effective 
within the time frame specified by the parties in the compact 
or funding agreement. In the absence of such a specification, 
such retrocession shall become effective on--
          (1) the earlier of--
                  (A) one year from the date of submission of 
                such request; or
                  (B) the date on which the funding agreement 
                expires; or
          (2) such date as may be mutually agreed by the 
        Secretary and the Indian tribe.
  (g) Withdrawal.--
          (1) Process.--An Indian tribe may fully or partially 
        withdraw from a participating inter-tribal consortium 
        or tribal organization its share of any program, 
        function, service, or activity (or portions thereof) 
        included in a compact or funding agreement. Such 
        withdrawal shall become effective within the time frame 
        specified in the resolution which authorizes transfer 
        to the participating tribal organization or inter-
        tribal consortium. In the absence of a specific time 
        frame set forth in the resolution, such withdrawal 
        shall become effective on--
                  (A) the earlier of--
                          (i) one year from the date of 
                        submission of such request; or
                          (ii) the date on which the funding 
                        agreement expires; or
                  (B) such date as may be mutually agreed upon 
                by the Secretary, the withdrawing Indian tribe, 
                and the participating tribal organization or 
                inter-tribal consortium that has signed the 
                compact or funding agreement on behalf of the 
                withdrawing Indian tribe, inter-tribal 
                consortium, or tribal organization.
          (2) Distribution of funds.--When an Indian tribe or 
        tribal organization eligible to enter into a self-
        determination contract under title I or a compact or 
        funding agreement under this title fully or partially 
        withdraws from a participating inter-tribal consortium 
        or tribal organization, the withdrawing Indian tribe or 
        tribal organization shall be entitled to its tribal 
        share of funds supporting those programs, services, 
        functions, or activities (or portions thereof) which it 
        will be carrying out under its own self-determination 
        contract or compact and funding agreement (calculated 
        on the same basis as the funds were initially allocated 
        in the funding agreement of the inter-tribal consortium 
        or tribal organization), and such funds shall be 
        transferred from the funding agreement of the inter-
        tribal consortium or tribal organization, provided that 
        the provisions of sections 102 and 105(i), as 
        appropriate, shall apply to such withdrawing Indian 
        tribe.
          (3) Regaining mature contract status.--If an Indian 
        tribe elects to operate all or some programs, services, 
        functions, or activities (or portions thereof) carried 
        out under a compact or funding agreement under this 
        title through a self-determination contract under title 
        I, at the option of the Indian tribe, the resulting 
        self-determination contract shall be a mature self-
        determination contract.
  (h) Nonduplication.--For the period for which, and to the 
extent to which, funding is provided under this title or under 
the compact or funding agreement, the Indian tribe shall not be 
entitled to contract with the Secretary for such funds under 
section 102, except that such Indian tribe shall be eligible 
for new programs on the same basis as other Indian tribes.

SEC. 507. PROVISIONS RELATING TO THE SECRETARY.

  (a) Mandatory Provisions.--
          (1) Health status reports.--Compacts or funding 
        agreements negotiated between the Secretary and an 
        Indian tribe shall include a provision that requires 
        the Indian tribe to report on health status and service 
        delivery--
                  (A) to the extent such data is not otherwise 
                available to the Secretary and specific funds 
                for this purpose are provided by the Secretary 
                under the funding agreement; and
                  (B) if such reporting shall impose minimal 
                burdens on the participating Indian tribe and 
                such requirements are promulgated under section 
                517.
          (2) Reassumption--(A) Compacts and funding agreements 
        negotiated between the Secretary and an Indian tribe 
        shall include a provision authorizing the Secretary to 
        reassume operation of a program, service, function, or 
        activity (or portions thereof) and associated funding 
        if there is a specific finding relative to that 
        program, service, function, or activity (or portion 
        thereof) of--
                  (i) imminent endangerment of the public 
                health caused by an act or omission of the 
                Indian tribe, and the imminent endangerment 
                arises out of a failure to carry out the 
                compact or funding agreement; or
                  (ii) gross mismanagement with respect to 
                funds transferred to a tribe by a compact or 
                funding agreement, as determined by the 
                Secretary in consultation with the Inspector 
                General, as appropriate.
          (B) The Secretary shall not reassume operation of a 
        program, service, function, or activity (or portions 
        thereof) unless (i) the Secretary has first provided 
        written notice and a hearing on the record to the 
        Indian tribe; and (ii) the Indian tribe has not taken 
        corrective action to remedy the imminent endangerment 
        to public health or gross mismanagement.
          (C) Notwithstanding subparagraph (B), the Secretary 
        may, upon written notification to the tribe, 
        immediately reassume operation of a program, service, 
        function, or activity (or portion thereof) and 
        associated funding if (i) the Secretary makes a finding 
        of imminent substantial and irreparable endangerment of 
        the public health caused by an act or omission of the 
        Indian tribe; and (ii) the endangerment arises out of a 
        failure to carry out the compact or funding agreement. 
        If the Secretary reassumes operation of a program, 
        service, function, or activity (or portion thereof) 
        under this subparagraph, the Secretary shall provide 
        the tribe with a hearing on the record not later than 
        10 days after such reassumption.
          (D) In any hearing or appeal involving a decision to 
        reassume operation of a program, service, function, or 
        activity (or portion thereof), the Secretary shall have 
        the burden of proof of demonstrating by clear and 
        convincing evidence the validity of the grounds for the 
        reassumption.
  (b) Final Offer.--In the event the Secretary and a 
participating Indian tribe are unable to agree, in whole or in 
part, on the terms of a compact or funding agreement (including 
funding levels), the Indian tribe may submit a final offer to 
the Secretary. Not more than 45 days after such submission, or 
within a longer time agreed upon by the Indian tribe, the 
Secretary shall review and make a determination with respect to 
such offer. In the absence of a timely rejection of the offer, 
in whole or in part, made in compliance with subsection (c), 
the offer shall be deemed agreed to by the Secretary.
  (c) Rejection of Final Offers.--If the Secretary rejects an 
offer made under subsection (b) (or one or more provisions or 
funding levels in such offer), the Secretary shall provide--
          (1) a timely written notification to the Indian tribe 
        that contains a specific finding that clearly 
        demonstrates, or that is supported by a controlling 
        legal authority, that--
                  (A) the amount of funds proposed in the final 
                offer exceeds the applicable funding level to 
                which the Indian tribe is entitled under this 
                title;
                  (B) the program, function, service, or 
                activity (or portion thereof) that is the 
                subject of the final offer is an inherent 
                Federal function that cannot legally be 
                delegated to an Indian tribe;
                  (C) the Indian tribe cannot carry out the 
                program, function, service, or activity (or 
                portion thereof) in a manner that would not 
                result in significant danger or risk to the 
                public health; or
                  (D) the tribe is not eligible to participate 
                in self-governance under section 503;
          (2) technical assistance to overcome the objections 
        stated in the notification required by paragraph (1);
          (3) the Indian tribe with a hearing on the record 
        with the right to engage in full discovery relevant to 
        any issue raised in the matter and the opportunity for 
        appeal on the objections raised, provided that the 
        Indian tribe may, in lieu of filing such appeal, 
        directly proceed to initiate an action in a Federal 
        district court pursuant to section 110(a); and
          (4) the Indian tribe with the option of entering into 
        the severable portions of a final proposed compact or 
        funding agreement, or provision thereof, (including 
        lesser funding amount, if any), that the Secretary did 
        not reject, subject to any additional alterations 
        necessary to conform the compact or funding agreement 
        to the severed provisions. If an Indian tribe exercises 
        the option specified herein, it shall retain the right 
        to appeal the Secretary's rejection under this section, 
        and paragraphs (1), (2), and (3) shall only apply to 
        that portion of the proposed final compact, funding 
        agreement or provision thereof that was rejected by the 
        Secretary.
  (d) Burden of Proof.--With respect to any hearing or appeal 
or civil action conducted pursuant to this section, the 
Secretary shall have the burden of demonstrating by clear and 
convincing evidence the validity of the grounds for rejecting 
the offer (or a provision thereof) made under subsection (b).
  (e) Good Faith.--In the negotiation of compacts and funding 
agreements the Secretary shall at all times negotiate in good 
faith to maximize implementation of the self-governance policy. 
The Secretary shall carry out this title in a manner that 
maximizes the policy of tribal self-governance, consistent with 
section 3.
  (f) Savings.--To the extent that programs, functions, 
services, or activities (or portions thereof) carried out by 
Indian tribes under this title reduce the administrative or 
other responsibilities of the Secretary with respect to the 
operation of Indian programs and result in savings that have 
not otherwise been included in the amount of tribal shares and 
other funds determined under section 508(c), the Secretary 
shall make such savings available to the Indian tribes, inter-
tribal consortia, or tribal organizations for the provision of 
additional services to program beneficiaries in a manner 
equitable to directly served, contracted, and compacted 
programs.
  (g) Trust Responsibility.--The Secretary is prohibited from 
waiving, modifying, or diminishing in any way the trust 
responsibility of the United States with respect to Indian 
tribes and individual Indians that exists under treaties, 
Executive orders, other laws, or court decisions.
  (h) Decisionmaker.--A decision that constitutes final agency 
action and relates to an appeal within the Department of Health 
and Human Services conducted under subsection (c) shall be made 
either--
          (1) by an official of the Department who holds a 
        position at a higher organizational level within the 
        Department than the level of the departmental agency in 
        which the decision that is the subject of the appeal 
        was made; or
          (2) by an administrative judge.

SEC. 508. TRANSFER OF FUNDS.

  (a) In General.--Pursuant to the terms of any compact or 
funding agreement entered into under this title, the Secretary 
shall transfer to the Indian tribe all funds provided for in 
the funding agreement, pursuant to subsection (c), and provide 
funding for periods covered by joint resolution adopted by 
Congress making continuing appropriations, to the extent 
permitted by such resolutions. In any instance where a funding 
agreement requires an annual transfer of funding to be made at 
the beginning of a fiscal year, or requires semiannual or other 
periodic transfers of funding to be made commencing at the 
beginning of a fiscal year, the first such transfer shall be 
made not later than 10 days after the apportionment of such 
funds by the Office of Management and Budget to the Department, 
unless the funding agreement provides otherwise.
  (b) Multiyear Funding.--The Secretary is hereby authorized to 
employ, upon tribal request, multiyear funding agreements, and 
references in this title to funding agreements shall include 
such multiyear agreements.
  (c) Amount of Funding.--The Secretary shall provide funds 
under a funding agreement under this title in an amount equal 
to the amount that the Indian tribe would have been entitled to 
receive under self-determination contracts under this Act, 
including amounts for direct program costs specified under 
section 106(a)(1) and amounts for contract support costs 
specified under sections 106(a)(2), (a)(3), (a)(5), and (a)(6), 
including any funds that are specifically or functionally 
related to the provision by the Secretary of services and 
benefits to the Indian tribe or its members, all without regard 
to the organizational level within the Department where such 
functions are carried out.
  (d) Prohibitions.--The Secretary is expressly prohibited 
from--
          (1) failing or refusing to transfer to an Indian 
        tribe its full share of any central, headquarters, 
        regional, area, or service unit office or other funds 
        due under this Act, except as required by Federal law;
          (2) withholding portions of such funds for transfer 
        over a period of years; and
          (3) reducing the amount of funds required herein--
                  (A) to make funding available for self-
                governance monitoring or administration by the 
                Secretary;
                  (B) in subsequent years, except pursuant to--
                          (i) a reduction in appropriations 
                        from the previous fiscal year for the 
                        program or function to be included in a 
                        compact or funding agreement;
                          (ii) a congressional directive in 
                        legislation or accompanying report;
                          (iii) a tribal authorization;
                          (iv) a change in the amount of pass-
                        through funds subject to the terms of 
                        the funding agreement; or
                          (v) completion of a project, 
                        activity, or program for which such 
                        funds were provided;
                  (C) to pay for Federal functions, including 
                Federal pay costs, Federal employee retirement 
                benefits, automated data processing, technical 
                assistance, and monitoring of activities under 
                this Act; or
                  (D) to pay for costs of Federal personnel 
                displaced by self-determination contracts under 
                this Act or self-governance;
except that such funds may be increased by the Secretary if 
necessary to carry out this Act or as provided in section 
105(c)(2).
  (e) Other Resources.--In the event an Indian tribe elects to 
carry out a compact or funding agreement with the use of 
Federal personnel, Federal supplies (including supplies 
available from Federal warehouse facilities), Federal supply 
sources (including lodging, airline transportation, and other 
means of transportation including the use of interagency motor 
pool vehicles) or other Federal resources (including supplies, 
services, and resources available to the Secretary under any 
procurement contracts in which the Department is eligible to 
participate), the Secretary is authorized to transfer such 
personnel, supplies, or resources to the Indian tribe.
  (f) Reimbursement to Indian Health Service.--With respect to 
functions transferred by the Indian Health Service to an Indian 
tribe, the Indian Health Service is authorized to provide goods 
and services to the Indian tribe, on a reimbursable basis, 
including payment in advance with subsequent adjustment, and 
the reimbursements received therefrom, along with the funds 
received from the Indian tribe pursuant to this title, may be 
credited to the same or subsequent appropriation account which 
provided the funding, such amounts to remain available until 
expended.
  (g) Prompt Payment Act.--Chapter 39 of title 31, United 
States Code, shall apply to the transfer of funds due under a 
compact or funding agreement authorized under this title.
  (h) Interest or Other Income on Transfers.--An Indian tribe 
is entitled to retain interest earned on any funds paid under a 
compact or funding agreement to carry out governmental or 
health purposes and such interest shall not diminish the amount 
of funds the Indian tribe is authorized to receive under its 
funding agreement in the year the interest is earned or in any 
subsequent fiscal year. Funds transferred under this Act shall 
be managed using the prudent investment standard.
  (i) Carryover of Funds.--All funds paid to an Indian tribe in 
accordance with a compact or funding agreement shall remain 
available until expended. In the event that an Indian tribe 
elects to carry over funding from one year to the next, such 
carryover shall not diminish the amount of funds the Indian 
tribe is authorized to receive under its funding agreement in 
that or any subsequent fiscal year.
  (j) Program Income.--All medicare, medicaid, or other program 
income earned by an Indian tribe shall be treated as 
supplemental funding to that negotiated in the funding 
agreement and the Indian tribe may retain all such income and 
expend such funds in the current year or in future years except 
to the extent that the Indian Health Care Improvement Act (25 
U.S.C. 1601 et seq.) provides otherwise for medicare and 
medicaid receipts, and such funds shall not result in any 
offset or reduction in the amount of funds the Indian tribe is 
authorized to receive under its funding agreement in the year 
the program income is received or for any subsequent fiscal 
year.
  (k) Limitation of Costs.--An Indian tribe shall not be 
obligated to continue performance that requires an expenditure 
of funds in excess of the amount of funds transferred under a 
compact or funding agreement. If at any time the Indian tribe 
has reason to believe that the total amount provided for a 
specific activity in the compact or funding agreement is 
insufficient the Indian tribe shall provide reasonable notice 
of such insufficiency to the Secretary. If the Secretary does 
not increase the amount of funds transferred under the funding 
agreement, the Indian tribe may suspend performance of the 
activity until such time as additional funds are transferred.

SEC. 509. CONSTRUCTION PROJECTS.

  (a) In General.--Indian tribes participating in tribal self-
governance may carry out construction projects under this title 
if they elect to assume all Federal responsibilities under the 
National Environmental Policy Act of 1969, the Historic 
Preservation Act, and related provisions of law that would 
apply if the Secretary were to undertake a construction 
project, by adopting a resolution (1) designating a certifying 
officer to represent the Indian tribe and to assume the status 
of a responsible Federal official under such laws, and (2) 
accepting the jurisdiction of the Federal court for the purpose 
of enforcement of the responsibilities of the responsible 
Federal official under such environmental laws.
  (b) Negotiations.--Construction project proposals shall be 
negotiated pursuant to the statutory process in section 105(m) 
and resulting construction project agreements shall be 
incorporated into funding agreements as addenda.
  (c) Codes and Standards.--The Indian tribe and the Secretary 
shall agree upon and specify appropriate buildings codes and 
architectural/engineering standards (including health and 
safety) which shall be in conformity with nationally recognized 
standards for comparable projects.
  (d) Responsibility for Completion.--The Indian tribe shall 
assume responsibility for the successful completion of the 
construction project in accordance with the negotiated 
construction project agreement.
  (e) Funding.--Funding for construction projects carried out 
under this title shall be included in funding agreements as 
annual advance payments, with semiannual payments at the option 
of the Indian tribe. Annual advance and semiannual payment 
amounts shall be determined based on mutually agreeable project 
schedules reflecting work to be accomplished within the advance 
payment period, work accomplished and funds expended in 
previous paymentperiods, and the total prior payments. The 
Secretary shall include associated project contingency funds with each 
advance payment installment. The Indian tribe shall be responsible for 
the management of the contingency funds included in funding agreements.
  (f) Approval.--The Secretary shall have at least one 
opportunity to approve project planning and design documents 
prepared by the Indian tribe in advance of construction of the 
facilities specified in the scope of work for each negotiated 
construction project agreement or amendment thereof which 
results in a significant change in the original scope of work. 
The Indian tribe shall provide the Secretary with project 
progress and financial reports not less than semiannually. The 
Secretary may conduct on-site project oversight visits 
semiannually or on an alternate schedule agreed to by the 
Secretary and the Indian tribe.
  (g) Wages.--All laborers and mechanics employed by 
contractors and subcontractors in the construction, alteration, 
or repair, including painting or decorating of building or 
other facilities in connection with construction projects 
undertaken by self-governance Indian tribes under this Act, 
shall be paid wages at not less than those prevailing wages on 
similar construction in the locality as determined by the 
Secretary of Labor in accordance with the Davis-Bacon Act of 
March 3, 1931 (46 Stat. 1494). With respect to construction, 
alteration, or repair work to which the Act of March 3, 1921, 
is applicable under the terms of this section, the Secretary of 
Labor shall have the authority and functions set forth in 
Reorganization Plan Numbered 14, of 1950, and section 2 of the 
Act of June 13, 1934 (48 Stat. 948).
  (h) Application of Other Laws.--Unless otherwise agreed to by 
the Indian tribe, no provision of the Office of Federal 
Procurement Policy Act, the Federal Acquisition Regulations 
issued pursuant thereto, or any other law or regulation 
pertaining to Federal procurement (including Executive orders) 
shall apply to any construction project conducted under this 
title.

SEC. 510. FEDERAL PROCUREMENT LAWS AND REGULATIONS.

  Notwithstanding any other provision of law, unless expressly 
agreed to by the participating Indian tribe, the compacts and 
funding agreements entered into under this title shall not be 
subject to Federal contracting or cooperative agreement laws 
and regulations (including Executive orders and the regulations 
relating to procurement issued by the Secretary), except to the 
extent that such laws expressly apply to Indian tribes.

SEC. 511. CIVIL ACTIONS.

  (a) Contract Defined.--For the purposes of section 110, the 
term ``contract'' shall include compacts and funding agreements 
entered into under this title.
  (b) Applicability of Certain Laws.--Section 2103 of the 
Revised Statutes of the United States Code (25 U.S.C. 81) and 
section 16 of the Act of June 18, 1934 (25 U.S.C. 476), shall 
not apply to attorney and other professional contracts entered 
into by Indian tribes participating in self-governance under 
this title.
  (c) References.--All references in the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450 et 
seq.) to section 1 of the Act of June 26, 1936 (25 U.S.C. 81) 
are hereby deemed to include section 1 of the Act of July 3, 
1952 (25 U.S.C. 82a).

SEC. 512. FACILITATION.

  (a) Secretarial Interpretation.--Except as otherwise provided 
by law, the Secretary shall interpret all Federal laws, 
Executive orders and regulations in a manner that will 
facilitate--
          (1) the inclusion of programs, services, functions, 
        and activities (or portions thereof) and funds 
        associated therewith, in the agreements entered into 
        under this section;
          (2) the implementation of compacts and funding 
        agreements entered into under this title; and
          (3) the achievement of tribal health goals and 
        objectives.
  (b) Regulation Waiver.--
          (1) An Indian tribe may submit a written request to 
        waive application of a regulation promulgated under 
        this Act for a compact or funding agreement entered 
        into with the Indian Health Service under this title, 
        to the Secretary identifying the applicable Federal 
        regulation under this Act sought to be waived and the 
        basis for the request.
          (2) Not later than 90 days after receipt by the 
        Secretary of a written request by an Indian tribe to 
        waive application of a regulation under this Act for a 
        compact or funding agreement entered into under this 
        title, the Secretary shall either approve or deny the 
        requested waiver in writing. A denial may be made only 
        upon a specific finding by the Secretary that 
        identified language in the regulation may not be waived 
        because such waiver is prohibited by Federal law. A 
        failure to approve or deny a waiver request not later 
        than 90 days after receipt shall be deemed an approval 
        of such request. The Secretary's decision shall be 
        final for the Department.
  (c) Access to Federal Property.--In connection with any 
compact or funding agreement executed pursuant to this title or 
an agreement negotiated under the Tribal Self-Governance 
Demonstration Project established under title III, as in effect 
before the enactment of the Tribal Self-Governance Amendments 
of 1999, upon the request of an Indian tribe, the Secretary--
          (1) shall permit an Indian tribe to use existing 
        school buildings, hospitals, and other facilities and 
        all equipment therein or appertaining thereto and other 
        personal property owned by the Government within the 
        Secretary's jurisdiction under such terms and 
        conditions as may be agreed upon by the Secretary and 
        the tribe for their use and maintenance;
          (2) may donate to an Indian tribe title to any 
        personal or real property found to be excess to the 
        needs of any agency of the Department, or the General 
        Services Administration, except that--
                  (A) subject to the provisions of subparagraph 
                (B), title to property and equipment furnished 
                by the Federal Government for use in the 
                performance of the compact or funding agreement 
                or purchased with funds under any compact or 
                funding agreement shall, unless otherwise 
                requested by the Indian tribe, vest in the 
                appropriate Indian tribe;
                  (B) if property described in subparagraph (A) 
                has a value in excess of $5,000 at the time of 
                retrocession, withdrawal, or reassumption, at 
                the option of the Secretary upon the 
                retrocession, withdrawal, or reassumption, 
                title to such property and equipment shall 
                revert to the Department of Health and Human 
                Services; and
                  (C) all property referred to in subparagraph 
                (A) shall remain eligible for replacement, 
                maintenance, and improvement on the same basis 
                as if title to such property were vested in the 
                United States; and
          (3) shall acquire excess or surplus Government 
        personal or real property for donation to an Indian 
        tribe if the Secretary determines the property is 
        appropriate for use by the Indian tribe for any purpose 
        for which a compact or funding agreement is authorized 
        under this title.
  (d) Matching or Cost-Participation Requirement.--All funds 
provided under compacts, funding agreements, or grants made 
pursuant to this Act, shall be treated as non-Federal funds for 
purposes of meeting matching or cost participation requirements 
under any other Federal or non-Federal program.
  (e) State Facilitation.--States are hereby authorized and 
encouraged to enact legislation, and to enter into agreements 
with Indian tribes to facilitate and supplement the 
initiatives, programs, and policies authorized by this title 
and other Federal laws benefiting Indians and Indian tribes.
  (f) Rules of Construction.--Each provision of this title and 
each provision of a compact or funding agreement shall be 
liberally construed for the benefit of the Indian tribe 
participating in self-governance and any ambiguity shall be 
resolved in favor of the Indian tribe.

SEC. 513. BUDGET REQUEST.

  (a) In General.--The President shall identify in the annual 
budget request submitted to the Congress under section 1105 of 
title 31, United States Code, all funds necessary to fully fund 
all funding agreements authorized under this title, including 
funds specifically identified to fund tribal base budgets. All 
funds so appropriated shall be apportioned to the Indian Health 
Service. Such funds shall be provided to the Office of Tribal 
Self-Governance which shall be responsible for distribution of 
all funds provided under section 505. Nothing in this provision 
shall be construed to authorize the Indian Health Service to 
reduce the amount of funds that a self-governance tribe is 
otherwise entitled to receive under its funding agreement or 
other applicable law, whether or not such funds are made 
available to the Office of Tribal Self-Governance under this 
section.
  (b) Present Funding; Shortfalls.--In such budget request, the 
President shall identify the level of need presently funded and 
any shortfall in funding (including direct program and contract 
support costs) for each Indian tribe, either directly by the 
Secretary, under self-determination contracts, or under 
compacts and funding agreements authorized under this title.

SEC. 514. REPORTS.

  (a) Annual Report.--Not later than January 1 of each year 
after the date of the enactment of this title, the Secretary 
shall submit to the Committee on Resources of the House of 
Representatives and the Committee on Indian Affairs of the 
Senate a written reportregarding the administration of this 
title. Such report shall include a detailed analysis of the level of 
need being presently funded or unfunded for each Indian tribe, either 
directly by the Secretary, under self-determination contracts under 
title I, or under compacts and funding agreements authorized under this 
Act. In compiling reports pursuant to this section, the Secretary may 
not impose any reporting requirements on participating Indian tribes or 
tribal organizations, not otherwise provided in this Act.
  (b) Contents.--The report shall be compiled from information 
contained in funding agreements, annual audit reports, and 
Secretarial data regarding the disposition of Federal funds and 
shall--
          (1) identify the relative costs and benefits of self-
        governance;
          (2) identify, with particularity, all funds that are 
        specifically or functionally related to the provision 
        by the Secretary of services and benefits to self-
        governance Indian tribes and their members;
          (3) identify the funds transferred to each self-
        governance Indian tribe and the corresponding reduction 
        in the Federal bureaucracy;
          (4) identify the funding formula for individual 
        tribal shares of all headquarters funds, together with 
        the comments of affected Indian tribes or tribal 
        organizations, developed under subsection (c);
          (5) identify amounts expended in the preceding fiscal 
        year to carry out inherent Federal functions, including 
        an identification of those functions by type and 
        location;
          (6) contain a description of the method or methods 
        (or any revisions thereof) used to determine the 
        individual tribal share of funds controlled by all 
        components of the Indian Health Service (including 
        funds assessed by any other Federal agency) for 
        inclusion in self-governance compacts or funding 
        agreements;
          (7) prior to being submitted to Congress, be 
        distributed to the Indian tribes for comment, such 
        comment period to be for no less than 30 days; and
          (8) include the separate views and comments of the 
        Indian tribes or tribal organizations.
  (c) Report on Fund Distribution Method.--Not later than 180 
days after the date of enactment of this title, the Secretary 
shall, after consultation with Indian tribes, submit a written 
report to the Committee on Resources of the House of 
Representatives and the Committee on Indian Affairs of the 
Senate which describes the method or methods used to determine 
the individual tribal share of funds controlled by all 
components of the Indian Health Service (including funds 
assessed by any other Federal agency) for inclusion in self-
governance compacts or funding agreements.

SEC. 515. DISCLAIMERS.

  (a) No Funding Reduction.--Nothing in this title shall be 
construed to limit or reduce in any way the funding for any 
program, project, or activity serving anIndian tribe under this 
or other applicable Federal law. Any Indian tribe that alleges that a 
compact or funding agreement is in violation of this section may apply 
the provisions of section 110.
  (b) Federal Trust and Treaty Responsibilities.--Nothing in 
this Act shall be construed to diminish in any way the trust 
responsibility of the United States to Indian tribes and 
individual Indians that exists under treaties, Executive 
orders, or other laws and court decisions.
  (c) Tribal Employment.--For purposes of section 2(2) of the 
Act of July 5, 1935 (49 Stat. 450, chapter 372) (commonly known 
as the National Labor Relations Act), an Indian tribe carrying 
out a self-determination contract, compact, annual funding 
agreement, grant, or cooperative agreement under this Act shall 
not be considered an employer.
  (d) Obligations of the United States.--The Indian Health 
Service under this Act shall neither bill nor charge those 
Indians who may have the economic means to pay for services, 
nor require any Indian tribe to do so.

SEC. 516. APPLICATION OF OTHER SECTIONS OF THE ACT.

  (a) Mandatory Application.--All provisions of sections 5(b), 
6, 7, 102(c) and (d), 104, 105(k) and (l), 106(a) through (k), 
and 111 of this Act and section 314 of Public Law 101-512 
(coverage under the Federal Tort Claims Act), to the extent not 
in conflict with this title, shall apply to compacts and 
funding agreements authorized by this title.
  (b) Discretionary Application.--At the request of a 
participating Indian tribe, any other provision of title I, to 
the extent such provision is not in conflict with this title, 
shall be made a part of a funding agreement or compact entered 
into under this title. The Secretary is obligated to include 
such provision at the option of the participating Indian tribe 
or tribes. If such provision is incorporated it shall have the 
same force and effect as if it were set out in full in this 
title. In the event an Indian tribe requests such incorporation 
at the negotiation stage of a compact or funding agreement, 
such incorporation shall be deemed effective immediately and 
shall control the negotiation and resulting compact and funding 
agreement.

SEC. 517. REGULATIONS.

  (a) In General.--
          (1) Not later than 90 days after the date of 
        enactment of this title, the Secretary shall initiate 
        procedures under subchapter III of chapter 5 of title 
        5, United States Code, to negotiate and promulgate such 
        regulations as are necessary to carry out this title.
          (2) Proposed regulations to implement this title 
        shall be published in the Federal Register by the 
        Secretary no later than 1 year after the date of 
        enactment of this title.
          (3) The authority to promulgate regulations under 
        this title shall expire 21 months after the date of 
        enactment of this title.
  (b) Committee.--A negotiated rulemaking committee established 
pursuant to section 565 of title 5, United States Code, to 
carry out this section shall have as its members only Federal 
and tribal government representatives, a majority of whom shall 
be nominated by and be representatives of Indian tribes with 
funding agreements under this Act, and the Committee shall 
confer with, and accommodate participation by, representatives 
of Indian tribes,inter-tribal consortia, tribal organizations, 
and individual tribal members.
  (c) Adaptation of Procedures.--The Secretary shall adapt the 
negotiated rulemaking procedures to the unique context of self-
governance and the government-to-government relationship 
between the United States and Indian tribes.
  (d) Effect.--The lack of promulgated regulations shall not 
limit the effect of this title.
  (e) Effect of Circulars, Policies, Manuals, Guidances, and 
Rules.--Unless expressly agreed to by the participating Indian 
tribe in the compact or funding agreement, the participating 
Indian tribe shall not be subject to any agency circular, 
policy, manual, guidance, or rule adopted by the Indian Health 
Service, except for the eligibility provisions of section 
105(g).

SEC. 518. APPEALS.

  In any appeal (including civil actions) involving decisions 
made by the Secretary under this title, the Secretary shall 
have the burden of proof of demonstrating by clear and 
convincing evidence--
          (1) the validity of the grounds for the decision 
        made; and
          (2) the decision is fully consistent with provisions 
        and policies of this title.

SEC. 519. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated such sums as may be 
necessary to carry out this title.

   TITLE VI--TRIBAL SELF-GOVERNANCE--DEPARTMENT OF HEALTH AND HUMAN 
                                SERVICES

SEC. 601. DEMONSTRATION PROJECT FEASIBILITY.

  (a) Study.--The Secretary shall conduct a study to determine 
the feasibility a Tribal Self-Governance Demonstration Project 
for appropriate programs, services, functions, and activities 
(or portions thereof) of the agency.
  (b) Considerations.--When conducting the study, the Secretary 
shall consider--
          (1) the probable effects on specific programs and 
        program beneficiaries of such a demonstration project;
          (2) statutory, regulatory, or other impediments to 
        implementation of such a demonstration project;
          (3) strategies for implementing such a demonstration 
        project;
          (4) probable costs or savings associated with such a 
        demonstration project;
          (5) methods to assure quality and accountability in 
        such a demonstration project; and
          (6) such other issues that may be determined by the 
        Secretary or developed through consultation pursuant to 
        section 602.
  (c) Report.--Not later than 18 months after the enactment of 
this title, the Secretary shall submit a report to the 
Committee on Resources of the House of Representatives and the 
Committee on Indian Affairs of the Senate. The report shall 
contain--
          (1) the results of the study;
          (2) a list of programs, services, functions, and 
        activities (or portions thereof) within the agency 
        which it would be feasible to include in a Tribal Self-
        Governance Demonstration Project;
          (3) a list of programs, services, functions, and 
        activities (or portions thereof) included in the list 
        provided pursuant to paragraph (2) which could be 
        included in a Tribal Self-Governance Demonstration 
        Project without amending statutes, or waiving 
        regulations that the Secretary may not waive;
          (4) a list of legislative actions required in order 
        to include those programs, services, functions, and 
        activities (or portions thereof) included in the list 
        provided pursuant to paragraph (2) but not included in 
        the list provided pursuant to paragraph (3) in a Tribal 
        Self-Governance Demonstration Project; and
          (5) any separate views of tribes and other entities 
        consulted pursuant to section 602 related to the 
        information provided pursuant to paragraph (1) through 
        (4).

SEC. 602. CONSULTATION.

  (a) Study Protocol.--
          (1) Consultation with indian tribes.--The Secretary 
        shall consult with Indian tribes to determine a 
        protocol for consultation under subsection (b) prior to 
        consultation under such subsection with the other 
        entities described in such subsection. The protocol 
        shall require, at a minimum, that--
                  (A) the government-to-government relationship 
                with Indian tribes forms the basis for the 
                consultation process;
                  (B) the Indian tribes and the Secretary 
                jointly conduct the consultations required by 
                this section; and
                  (C) the consultation process allow for 
                separate and direct recommendations from the 
                Indian tribes and other entities described in 
                subsection (b).
          (2) Opportunity for public comment.--In determining 
        the protocol described in paragraph (1), the Secretary 
        shall publish the proposed protocol and allow a period 
        of not less than 30 days for comment by entities 
        described in subsection (b) and other interested 
        individuals, and shall take comments received into 
        account in determining the final protocol.
  (b) Conducting Study.--In conducting the study under this 
title, the Secretary shall consult with Indian tribes, States, 
counties, municipalities, program beneficiaries, and interested 
public interest groups, and may consult with other entities as 
appropriate.

SEC. 603. DEFINITIONS.

  (a) In General.--For purposes of this title, the Secretary 
may use definitions provided in title V.
  (b) Agency.--For purposes of this title, the term ``agency'' 
shall mean any agency or other organizational unit of the 
Department of Health and Human Services, other than the Indian 
Health Service.

SEC. 604. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated for fiscal years 2000 
and 2001 such sums as may be necessary to carry out this title. 
Such sums shall remain available until expended.

                 ADDITIONAL VIEWS BY HON. GEORGE MILLER

    The nature of Self-Governance is rooted in the inherent 
sovereignty of American Indian and Alaska Native tribes. From 
the founding of this nation, Indian tribes and Alaska Native 
villages have been recognized as ``distinct, independent, 
political communities'' exercising powers of self-government, 
not by virtue of any delegation of powers from the federal 
government, but rather by virtue of their own innate 
sovereignty. See Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 
559 (1832). See also Santa Clara Pueblo v. Martinez, 436 U.S. 
49, 55 (1978). The tribes' sovereignty predates the founding of 
the United States and its Constitution and forms the backdrop 
against which the United States has continually entered into 
relations with Indian tribes and Native villages.
    The present model of tribal Self-Governance arose out of 
the federal policy of Indian Self-Determination. The modern 
Self-Determination era began as Congress and contemporary 
Administrations ended the dubious experiment of Termination 
which was intended to end the federal trust responsibility to 
Native Americans.
    The centerpiece of the Termination policy, House Concurrent 
Resolution 108, stated that ``Indian Tribes and individual 
members thereof, should be freed from Federal supervision and 
control and from all disabilities and limitations specially 
applicable to Indians.'' H. Con. Res. 108, 83rd Cong., 1st 
Sess. (1953). While the intent of this legislation was to free 
the Indians from federal rule, it also destroyed all protection 
and benefits they received from the government. The same year, 
Congress enacted Public Law 280 which further eroded tribal 
sovereignty by transferring criminal jurisdiction from the 
federal government and the tribes to the state governments.
    As a policy, Termination was a disaster. Recognizing this, 
President Kennedy campaigned in 1960 promising the Indian 
tribes that:

          There would be no change in treaty or contractual 
        relationships without the consent of the tribes 
        concerned. There would be protection of the Indian land 
        base, credit assistance, and encouragement of tribal 
        planning for economic development.

Francis Paul Prucha, The Great Father, 1087 (1984). 
Reservations were also included in many of the ``Great 
Society'' programs of the late 1960s, bringing a much-needed 
infusion of federal dollars onto many reservations. In 1968, 
President Lyndon B. Johnson delivered a message to Congress 
that stressed:

          [A] policy of maximum choice for the American Indian: 
        a policy expressed programs of self-help, self-
        development, self-determination. * * * The greatest 
        hope for Indian progress lies in the emergence of 
        Indian leadership and initiative in solving Indian 
        problems. Indians must have a voice in making the plans 
        and decisions in programs which are important to their 
        daily life.

Message from the President, March 6, 1968, Weekly Compilation 
of Presidential Documents, vol. IV, No. 10, Wash. D.C., U.S. 
Gov. Printing Office.
    President Richard Nixon's 1970 ``Special Message on Indian 
Affairs'' also called for increased tribal self-determination.

          This, then, must be the goal of any new national 
        policy toward the Indian people: to strengthen the 
        Indian's sense of autonomy without threatening his 
        sense of community. We must assure the Indian that he 
        can assume control of his own life without being 
        separated involuntarily from the tribal group. And we 
        must make it clear that Indians can become independent 
        of Federal control without being cut off from Federal 
        concern and Federal support. * * *

Special Message to the Congress, Pub. Papers, 564, 567 (1970). 
Together, these messages sparked Congress to work on 
legislation that laid the foundation for modern federal Indian 
policy for the remainder of this century. And so, five years 
later, Congress enacted one of the most profound and powerful 
pieces of Indian legislation in this Nation's history.
    In 1975, Congress passed the Indian Self-Determination and 
Education Assistance Act, Pub. L. No. 93-638. This legislation 
gave Indian tribes and Alaska Native villages the right to 
assume responsibility for the administration of federal 
programs which benefitted Indians. In addition to assuming the 
authority to make operating and administrative decisions 
regarding the way these federal programs would be run, tribe 
that chose to enter into Indian Self-Determination Act (or 
``638'') contracts were given the right to receive the federal 
funds that the agencies--generally the Bureau of Indian Affairs 
(BIA) and the Indian Health Service (IHS)--would have 
ordinarily received for those programs. Unlike former policy, 
the Indian Self-Determination Act did not relieve the 
government of their trust responsibilities to the tribes.
    Congress enacted the Indian Self-Determination Act believed 
it that (1) Indian tribes, having greater knowledge about and a 
greater stake in the outcome of these federal programs, would 
run BIA and IHS programs better and thus provide better 
services to their members, (2) the direct responsibility for 
running these programs would enhance and strengthen tribal 
governments, and (3) Indian tribes could make more efficient 
use of federal dollars than the existing federal bureaucracy, 
thus delivering more services than in the past.
    However, Indian Self-Determination Act or ``638'' contracts 
required volumes of paperwork to be filed as a means to 
supervise the tribes' activities. If a tribe wanted to operate 
more than oneprogram, it would have to exercise an additional 
638 contract which required a separate approval process. Though the Act 
was intended to decrease Federal involvement in the daily lives of 
reservation Indians, its specific performance and reporting 
requirements allowed BIA to remain a pervasive force in Indian affairs.
    At the time of its enactment, the 638 contract program did 
not allow tribes to move funds between programs to adapt to 
changing and unforeseen circumstances during a funding period. 
Thus, the tribes' powers to design or adapt programs according 
to tribal needs remained restricted.
    The inflexibility of 638 contracts also created problems 
with cash flow. Payments were made to tribes on a cost-
reimbursement basis, often many months after the tribe might 
have incurred major expenses. The tribes' main complaint, 
however, was that the 638 contract process made tribal staff 
primarily accountable to and measured by, not their own tribal 
councils but BIA employees at the Agency, Area and Central 
Offices. They had to follow strict federal laws, rules and 
regulations that were often of little relevance to day-to-day 
existence on an Indian reservation. If trust assets were 
involved, the BIA had to concur in any decisions made.
    Thus, while the Indian Self-Determination Act was, and is, 
still acknowledged as a watershed moment in the history of 
tribal self-governance, by the mid-1980's many tribal leaders 
agreed that it was time for even greater change. The federal 
bureaucracy devoted to 638 program oversight had simply grown 
out of control and the percentage of federal dollars allocated 
for Indian programs actually spent on the reservation was still 
far too small.
    To address these concerns, the Indian tribes asked Congress 
to consider amendments to the Self-Determination Act. During 
the fall of 1987, a series of articles appeared in the Arizona 
Republic entitled ``Fraud in Indian Country,'' that detailed a 
egregious history of waste and mismanagement within the BIA. 
These articles spurred House Appropriations Subcommittee on 
Interior and Related Agencies Chairman Sidney Yates (D-IL) to 
conduct an oversight hearing on these alleged abuses.
    At the hearing, Department of Interior officials proposed 
that funds appropriated to the Bureau of Indian Affairs be 
turned over to the tribes to let them manage their own affairs 
in an attempt to address these charges. But, the officials 
testified, by accepting the federal funds, the tribes would 
release the federal government from its trust responsibility. 
Many disagreed with this quid pro quo, but supported the 
concept of removing BIA middlemen from the funding process. 
With Chairman Yates' encouragement, tribal representatives met 
with the Secretary of the Interior and other Department 
officials the very next day to further hash out this concept. 
By mid-December of 1987, ten tribes had agreed to test the 
Department's proposal. Out of this proposal that the Tribal 
Self-Governance Demonstration Project was born.
    In 1988 Congress enacted Pub. L. No. 100-472 which created 
Title III of the Indian Self-Determination Act which authorized 
the Secretary of Interior to negotiate Self-Governance compacts 
with up to twenty tribes. These tribes, for the first time, 
would be able to ``plan, conduct, consolidate, and administer 
programs, services, and functions'' heretofore performed by 
Interior officials. The Act required that these programs be 
``otherwise available to Indian tribes or Indians,'' but within 
these parameters the tribes were authorized to redesign 
programs and reallocated funding according to terms negotiated 
in the compacts. Tribes would be able to prioritize spending on 
a systemic level, dramatically reducing the Federal role in the 
tribal decision-making process. But perhaps the biggest 
difference between the ``638'' contract process and the Self-
Governance program is that instead of funds coming from 
multiple contracts there would be one grant with a single 
Annual Funding Agreement.
    The original ten tribes that agreed to participate in the 
demonstration project were the Confederated Salish and Kootenai 
Tribes, Hoopa Tribe, Jamestown S'Klallam Tribe, Lummi Nation, 
Mescalero Apache Tribe, Mille Lacs Band of Ojibwe, Quinault 
Indian Nation, Red Lake Chippewa Tribe, Rosebud Sioux Tribe, 
and Tlingit and Haida Central Council.
    In 1991 Congress passed Pub. L. No. 102-184, ``The Tribal 
Self-Governance Demonstration Project Act'', which extended the 
Project for three more years and increased the number of Tribes 
participating to thirty. The bill required the new tribes 
participating to complete a one-year planning period before 
they could negotiate a Compact and Annual Funding Agreement. In 
1991, the Interior Department established the Office of Self-
Governance within the Office of the Assistant Secretary, Indian 
Affairs.
    The 1991 law also directed the IHS to conduct a feasibility 
study to examine the expansion of the Self-Governance project 
to IHS programs and services. The law also authorized the 
Secretary of Health and Human Services to establish an Office 
of Self-Governance in the IHS.
    In 1992, Congress amended section 314 of the Indian Health 
Care Improvement Act to allow the Secretary of Health and Human 
Services to negotiate Self-Governance compacts and annual 
funding agreements under Title III of the Indian Self-
Determination Act with Indian tribes. Pub. L. No. 102-573, sec. 
814. The Self-Governance Demonstration Project proved to be a 
success both in the Interior Department and the Department of 
Health and Human Services.
    In 1994, Congress responded by passing the ``Tribal Self-
Governance Act of 1994'' as part of the Indian Self-
Determination Act Amendments, Pub. L. No. 103-413. The Tribal 
Self-Governance Act, contained in Title IV of the Indian Self-
Determination Act, permanently established the Self-Governance 
program within the Department of Interior and thus solidifying 
the Federal government goals of negotiating with Indian Tribes 
and Alaska Native villages on a government-to-government basis 
while retaining the federal trust relationship. The Tribal 
Self-Governance Act allowed Self-Governance tribes to compact 
all programs and services that tribes could contract under 
Title I of the Indian Self-Determination Act. The Act required 
an ``orderly transition from Federal domination of programs and 
services to provide Indian tribes with meaningful authority to 
plan, conduct, redesign, and administer programs, services, 
functions, andactivities that meet the needs of the individual 
tribal communities.'' The Act also clarified the requirements and 
obligations of tribes entering the Self-Governance process.
    Tribes entering the Self-Governance program had to meet 
four eligibility requirements. First, the tribe (or tribes in 
the case of a consortium) must be federally recognized. Second, 
the tribe must document, with an official action of the tribal 
governing body, a formal request to enter negotiations with the 
Department of Interior. In the case of a consortium of tribes, 
the governing body of each participating tribe must authorize 
participation by an official action of the tribal governing 
body. Third, the tribe must demonstrate financial stability and 
financial management capability as evidenced by the tribe 
having no material audit exceptions in the required annual 
audit of the tribe's 638 contracts. Fourth, the tribe must have 
successfully completed a planning phase, requiring the 
submission of a final planning report which demonstrates that 
the tribe has conducted legal and budgetary research and 
internal tribal government and organizational planning.
    The 1994 Act then authorized the Secretary of Interior to 
negotiate annual funding agreements with eligible tribes in a 
manner consistent with the federal trust responsibility. The 
agreements authorize a tribe to:

          * * * plan, conduct, consolidate, and administer 
        programs, services, functions, and activities, or 
        portions thereof, administered by the Department of 
        Interior through the Bureau of Indian Affairs, without 
        regard to the agency or office of the Bureau of Indian 
        Affairs within which the program, service, function, 
        and activity, or portion thereof, is performed, 
        including funding for agency, area, and central office 
        functions. * * *

The 1994 Act's inclusion of ``agency, area, and central office 
functions,'' on contrast to Title III, means that with each new 
Self-Governance tribe, the resources of the various branches of 
the BIA delivering services to that tribe will shrink. To 
facilitate this transfer, the Act specifically lists all 
applicable activities for which tribes and the BIA receive 
corresponding funding.
    Under the 1994 Act, annual funding agreements include what 
the tribe would have received if the sum total of its 638 
contracts were added up, in addition to Area and Central Office 
funds and other Interior Programs. The process for review and 
award of Self-Governance compacts and annual funding agreements 
is streamlined when compared to 638 contracts. Once an 
agreement is negotiated, the Secretary submits it to the other 
Indian tribes served by the BIA and the two Congressional 
Committees of jurisdiction. Tribes may obtain their funding in 
either annual or semi-annual installments.
    The Indian tribes and the Administration agree that it is 
now time to take the next logical step forward in the Self-
Governance process and make the Self-Governance program 
permanent within the Department of Health and Human Services.
    The Tribal Self-Governance Amendments of 1999 establish a 
permanent Self-Governance Program within the Department of 
Health and Human Services under which American Indian and 
Alaska Native tribes may enter into compacts with the Secretary 
for the direct operation, control, and redesign of Indian 
Health Service (IHS) activities. A limited number of Indian 
tribes have had a similar right on a demonstration project 
basis since 1992 under Title III of the Indian Self-
Determination and Education Assistance Act. All Indian tribes 
have enjoyed a similar but lesser right to contract and operate 
individual IHS programs and functions under Title I of the 
Indian Self-Determination Act since 1975 (so-called ``638 
contracting'').
    In brief, the legislation would expand the number of tribes 
eligible to participate in Self-Governance, make it a permanent 
within the IHS and authorize the Secretary of Health and Human 
Services to conduct a feasibility study for the execution of 
Self-Governance compacts with Indian tribes for programs 
outside of the IHS. The 1998 amendments incorporate a number of 
federal contracting laws and regulations that have worked well 
for Indian tribes and the Department in the past.
    The legislation is modeled on the existing permanent Self-
Governance legislation for Interior Department programs 
contained in Title IV of the Indian Self-Determination Act. The 
legislation reflects years of negotiations among Indian tribes, 
Alaska Native villages, the Indian Health Service, and the 
Department of Health and Human Services.
    The 1999 amendments give Indian tribes who meet certain 
criteria the right to take over the operation of IHS functions, 
including the funds necessary to run them. The 1999 amendments 
continue the principle focus of the Self-Governance program: to 
remove needless and sometimes harmful layers of federal 
bureaucracy that dictate Indian affairs. By giving tribes 
direct control over federal programs run for their benefit and 
making them directly accountable to their members, Congress has 
enabled Indian tribes to run programs more efficiently and more 
innovatively than federal officials have in the past. And, 
allowing tribes to run these programs furthers the 
Congressional policy of strengthening and promoting tribal 
governments.
    Self-Governance recognizes that Indian tribes care for the 
health, safety, and welfare of their own members as well as 
that of non-Indians who either live on their reservations or 
conduct business with the tribes and are thus committed to safe 
and fair working conditions and practices.
    Sometimes we need to look to the past in order to 
understand our proper relationship with Indian tribes. More 
than two centuries ago, Congress set forth what should be our 
guiding principles. In 1789, Congress passed the Northwest 
Ordinance, a set of seven articles intended to govern the 
addition of new states to the Union. These articles served as a 
compact between the people and the States, and were ``to 
forever remain unalterable, unless by common consent.'' Act of 
Aug. 7, 1789, ch. 13, 1 Stat. 50, 52. Article Three set forth 
the Nation's policy towards Indian tribes:

          The utmost good faith shall always be observed 
        towards the Indians; their land and property shall 
        never be taken away from them without their consent * * 
        * but laws founded in justice and humanity shall from 
        time to time be made, for preventing wrongs being done 
        to them. * * *

The Founders carefully and wisely chose these principles to 
govern the conduct of this Nation in its dealing with American 
Indian tribes. Over the years, these principles have often been 
forgotten. Self-Government is but one of many ways to honor 
these principles.
    Two hundred years later, Justice Thurgood Marshall 
delivered a unanimous Supreme Court decision in 1983 stating 
that,

          Moreover, both the tribes and the Federal Government 
        are firmly committed to the goal of promoting tribal 
        self-government, a goal embodied in numerous federal 
        statutes. We have stressed that Congress' objective of 
        furthering tribal self-government encompasses far more 
        than encouraging tribal management of disputes between 
        members, but includes Congress' overriding goal of 
        encouraging ``tribal self-sufficiency and economic 
        development''.

New Mexico v. Mescalero Apache Tribe, 462 U.S. 324, 334-35, 
quoting White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 
143 (1980). See also National Farmers Union Insurance Co. v. 
Crow Tribe of Indians, 471 U.S. 845, 856 (1985) (concluding 
that ``[o]ur cases have often recognized that Congress is 
committed to a policy of supporting tribal self-government and 
self-determination.'').
    If we are to adhere and remain faithful to the principles 
that our Founders set forth--the principles of good faith, 
consent, justice and humanity--then we must continue to promote 
tribal self-government.

                                                     George Miller.